Annual Financial Statements for the year ended 30 June 2021 0 - Book - Page 26
SASOL LIMITED GROUP
Report of the Remuneration Committee continued
Details of the policy changes are in the policy section of this report. The following table summarises the concerns raised as well as Sasol’s
• STI and LTI targets not directly related to the reduction
of greenhouse gasses.
We will improve our climate change targets as we implement projects that
will directly reduce emissions. These projects will align with our Climate
Change Roadmap and long-term ambition.
• The peer group used for remuneration benchmarking
does not include enough chemicals companies or
We again reconsidered the peer group and have approved a combination of
JSE listed, chemicals and energy companies (see page 33).
• Short-term incentive (STI) targets should continue to
be relevant as the business transitions to the Future
The Committee annually reviews the STI and LTI targets to ensure ongoing
relevance as well as appropriate stretch to incentivise achievement across
a range of financial and non-financial targets which are informed by the
group’s key priorities ensuring value creation for our stakeholders.
• Return on Invested Capital (ROIC) should be
reconsidered as a LTI target.
We will reconsider the use of ROIC as we annually review all targets in our
LTI plan. For FY22, we believe that a return on capital invested into large
scale projects is still an appropriate metric.
• NED Fees are too high in relation to the company
We revised the fee structure for NEDs. This will be tabled for shareholder
approval at the 2021 AGM.
• Mutual separation packages agreed to for previous
The Board had considered the terms of the mutual separation agreements
with the Joint-CEOs to have been appropriate in the circumstances; however,
understands and acknowledges the views of shareholders on this matter.
COVID-19 and its impacts
Tragically, by 30 June, 2021, 63 Sasol employees had succumbed to
COVID-19. We mourn their loss and extend our sincere condolences
to their families, friends and colleagues. Sasol continues to provide
various forms of COVID-19 support to employees, including access
to emotional wellbeing programmes, supplying them with hand
sanitizers and face masks and amending work practices and shifts
to ensure social distancing wherever possible. The Group continues
to encourage those employees who can work from home to do
so. Those exposed to COVID-19 or who fall ill from the disease are
granted paid leave for the period of absence. No employees have
had to claim from the South African government’s COVID-19 relief
fund to replace salaries lost because of suspended operations nor
had to take unpaid leave.
The spread of COVID-19, the oil price collapse and volatility in
chemical prices in 2020 came at a time when Sasol’s balance sheet
was at peak gearing. This necessitated a reset of Sasol’s strategy
and a revision of its operating model. In November 2020, the Group
launched Sasol 2.0, a plan to get to Future Sasol which included a
revised purpose and refreshed values. The new operating model
required a review of the organisational design, a process which
was completed in the last quarter of 2021. Mindful of the impact
that all this change would have on employees, Sasol management
further increased its engagement with employees, ensuring
comprehensive and regular communications.
Preserving jobs was a key objective during the year. There were
1 355 employees who were displaced, or impacted by divestitures
and 766 voluntary severance packages were approved. Sasol
provided impacted employees with access to emotional and
financial planning support programmes to assist them in their
transition. As far as possible, the Group worked to ensure that
those employees transferred to new entities were offered
remuneration and benefits similar to those offered by Sasol.
The Committee’s most difficult decision in August 2020 was
to waive salary increases and short-term incentives for most
employees to conserve cash and protect jobs. This was even
though the Group had met some of the incentive targets in
2020 which would have ordinarily resulted in a pay-out of
incentives in September 2020. However, in the last quarter of
2021, in recognition of the delivery against the Sasol 2.0 targets,
the Committee approved limited salary increases on a partial
retroactive basis for those employees in role categories below
Leadership; Senior and Executive Management were excluded from
The Board also resolved to extend until November 2021, the 20%
Board fee sacrifice agreed to by NEDs in May 2020 and resident
NED fees were not increased to the approved levels.
Reward outcomes | 2021
For 2021, the Committee made no changes to inflight LTI awards
nor to the STI or LTI plan targets that were set for this financial
year, nor have the outcomes been adjusted for COVID-19 related
Performance against the STI targets were mostly at or ahead of
target with a total score of 117% of the maximum of 150%. This
was after the application of a 3% penalty due to the tragic loss of
one of our employees due to a work-related accident at Natref.
The Committee was particularly pleased with the management
of costs and the excellent progress made with the asset disposal
programme to avoid a Rights Issue. The High severity injury rate
was exceptional and we are satisfied with the delivery of the
Climate Change Road maps.
The Committee believes that this outcome is a fair representation
of the excellent results which were achieved in 2021 across all
financial and non-financial metrics.
The vesting of LTIs which were issued in 2018, subject to
performance targets over the period 1 July 2018 – 30 June 2021, will
for members of the GEC, subject to further service criteria being
met, vest at 44,7%. This represents ~17% of the original award
value due to the share price depreciation and low level of vesting.
The year-on-year increase in remuneration totals on the single
figure tables is as a result of the termination of the salary and
pension contribution sacrifice in 2021, which was introduced in May
2020 and the STI which was awarded for the first time since 2018.
Sasol Annual Financial Statements 2021