Annual Financial Statements for the year ended 30 June 2021 0 - Book - Page 34
1
2
3
4
SASOL LIMITED GROUP
Report of the Remuneration Committee continued
Pay gaps
Risk management
Globally, there is an increased focus on pay gap reporting as
many consider this to be a measure that promotes a fairer and
more equal society. Many countries have made the disclosure of
pay gaps and the CEO pay ratio obligatory, however not yet in
South Africa (SA). In 2020, the Committee approved a methodology
to track internal pay equity on a level, group, race and gender
basis, by country where we employ more than 250 employees on
a permanent basis and where the data is available considering
personal data privacy laws.
The Committee ensures effective risk management oversight in
relation to material remuneration risks within its scope and will
exercise its discretion within the Group’s overall risk framework.
The following processes mitigate against unintended outcomes:
The Sasol methodology compares the median total target
remuneration (TTR) of the 10% of highest Sasol earners per
country, with the median TTR of the lowest 10% Sasol earners
per country. This is similar to the methodology used in form
EEA4 which has to be submitted annually to the South African
Department of Employment and Labour. Target remuneration
is used as opposed to actual remuneration for year-on-year
comparisons to be made on the ratios as the impact of
macroeconomic factors on the LTI in particular, are excluded.
The Committee again reviewed the pay ratios. The larger pay gap
in SA can be explained due to the large number of unskilled and
semi-skilled workers in our mining business. Sasol does not employ
unskilled workers in other jurisdictions.
The Committee understands the importance of ensuring that
the wages of our most junior employees are sufficient to
accommodate a decent standard of living and will continue to track
the pay gap from this perspective. Over the past number of years,
higher percentage annual salary increases have been awarded
to employees covered by collective bargaining units than to top
management as is evident in the following graph:
Average increase budgets approved: F18 – FY21 (SA)
30
15
Unionised staff annual
increase budget %
Executive annual increase
budget %
0
Cumulative 2021
2020
2019
• The Remuneration Policy is transparent to all stakeholders.
• All executive reward policy exceptions are approved by the
Committee, or by the Board, as appropriate.
• Incentive plan design principles and targets as well as the reward
mix are reviewed annually.
• The vesting of LTI plans is subject to performance and/or
time-based criteria and awards are never backdated.
• Executives do not approve their own benefits or remuneration
and are recused from all discussions relating to their own
remuneration.
• The maximum incentive awards, on the basis of performance
outcomes, are capped by a pre-approved formula.
• The Committee retains discretion to alter any reward outcome.
• MSRs are implemented for Prescribed Officers and Executive
Directors.
• A comprehensive Clawback and Malus policy is in place.
• There is no accelerated vesting of LTIs at retirement and the
vesting periods of 3 and 5 years continue post the date of
retirement allowing for continued exposure to the share price
performance as well as the application of the Clawback and
Malus policy if required.
Details of key remuneration components
The use and application of remuneration benchmarks
We use benchmark data from the approved peer group to develop
pay bands and incentive plans as well as for the comparison
of employee benefits. One of the Committee’s key tasks is to
preserve the relevance, integrity and consistency of benchmarking.
Management also consults survey reports from various large
remuneration firms.
For the remuneration of GEC members and the NED fees, we select
a peer group of companies which includes those with a broadly
similar geographic footprint and/or product suite and/or size.
In 2021, we used the following peer group for executive
remuneration benchmarking purposes as well as for the Total
Shareholders’ Return (TSR) measurement in our LTI award:
2018
AkzoNobel
Continental Resources
Evonik Industries
Impala Platinum
Origin Materials
Albemarle
Covestro
Exxaro
Imperial Logistics
Repsol
Celanese
Devon Energy
Gold Fields
Kumba Iron Ore
Sibanye Stillwater
Clariant
Eastman
Hess Corp
Noble energy
Solvay
32
Sasol Annual Financial Statements 2021