Annual Financial Statements for the year ended 30 June 2021 0 - Book - Page 42
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SASOL LIMITED GROUP
Report of the Remuneration Committee continued
Outstanding unvested LTI awards | 2020 and 2021
For members of the GEC including executive directors, 65% of the LTIs awarded during 2021, are subject to the achievement of the following
CPTs in addition to time based vesting criteria of between three and five years. The balance of the award (35%) is subject to a five year time
based vesting criteria. The following table sets out the performance targets for outstanding unvested performance related LTI awards that
are in issue and where the performance will be assessed over the following two financial years.
Metrics: 2021 LTI awards
Threshold (0%)2
Target (100%)
Climate Change
Deliver 150 MW of renewable
energy by 30 June 2023
Deliver 200 MW of renewable Deliver 300 MW of renewable
energy by 30 June 2023
energy by 30 June 2023
25%
ROIC Rest of Sasol
ROIC (excl AUC)1 at SA WACC
of 13,5% per annum
ROIC (excl AUC)1 at SA WACC
of 13,5% + 1% = 14,5% per
annum
ROIC of 15,5% per annum
35%
ROIC US
ROIC (excl AUC)1 at US WACC
of 8% per annum
ROIC (excl AUC)1 at US WACC
8% + 0,5% = 8,5% per
annum
ROIC of 9% per annum
Relative TSR measured
against the peer group
Below 50 percentile of the
peer group
60 percentile of the peer
group
75 percentile of the peer
group
th
th
Stretch (200%)
Weighting
10%
th
30%
1. AUC = Assets under Construction.
2. Threshold is 0% for all targets except rTSR where 50% vesting is achieved @ Threshold.
For members of the GEC including executive directors, 100% of the LTIs awarded during 2020, are subject to the achievement of the
following CPTs in addition to time based vesting criteria of between three and five years.
The performance targets for the 2020 award are as follows:
Metrics
Target (100%)
Weighting
Increase in tons produced/head
2% Compound improvement on baseline
30%
ROIC (Rest of Sasol)
Rest of Sasol ROIC (excl AUC)1 at SA WACC 13,5% + 1% = 14,5% per annum
20%
ROIC (US)
US ROIC (excl AUC) at US WACC 8% + 0,5% = 8,5% per annum
10%
Relative TSR vs MSCI World Chemicals index
60 percentile of the index
20%
Relative TSR vs MSCI World Energy index
60th percentile of the index
20%
1
th
1. AUC = Assets under Construction.
Determining the IPFs
The Committee has the duty to assess the performance of the members of the Group Executive Committee (GEC) every year. We apply
the outcome of the assessment, in the form of an Individual Performance Factor (in the range of 0% – 150%), as a multiplier in calculating
short-term incentives. The Committee then approves the performance outcomes for the Prescribed Officers and makes a recommendation to
the Board, for its final decision, in respect of the performance outcomes of the Executive Directors.
In assessing the performance outcomes, the Committee considers the following: business results in the specific areas of responsibility;
leadership displayed both in and outside the area of responsibility; values displayed; relationships; and collaboration in and outside the
organisation.
For 2021, we were particularly mindful of the fact that members of the GEC have had to apply an extraordinary effort over the past 18 –
24 months. This was required to turn the Company around; maintain reliable and stable operations despite the devastating impacts of
COVID-19; stabilise the balance sheet; introduce the new operating model; regain the trust of our investors; and retain and motivate
employees to perform at their best during this very volatile and uncertain period.
In recent years, GEC members have made financial sacrifices through sacrifices in their salaries as well as pension contributions. On average,
they have forfeited 50% of the total target reward for the past three years due to the non-payment of the short-term incentive, no salary
increase in the past financial year, the weakening of the share price and the low level of vesting of long-term incentives (which has been at an
average of 44% over the past four years).
The Committee is satisfied that over the past few years the Remuneration Policy has delivered reward results that have aligned with the
business results (including downward moderation of incentive outcomes at the Committee’s discretion). However, we recognise that in
better times, rewards should also be commensurate with the better business results. Therefore, we agreed that the individual performance
outcomes for leadership be in excess of 100% considering Sasol’s excellent business results in 2021. The leadership has done a sterling job in
leading the organisation through the perfect storm that Sasol faced during 2020 and 2021 not only because of the impacts of COVID-19, but
also because of the macroeconomic environment which severely impacted Sasol’s financial viability.
The unlocking of $6 billion of cash in record time was exceptional; Sasol avoided having to carry out a rights issue; rating agencies declared
no further downgrades after June 2020; and the business did not breach debt covenant levels (the target was 4x net debt:EBITDA in
December 2020 and the 30 June 2021 result was 1,5x net debt:EBITDA). The GEC and Sasol’s leadership implemented the new operating model
less than 12 months after it was approved, and did so without impacting business operations and continuity; there was no labour unrest;
our safety results improved significantly; and there was a reduction in the complexity of our governance and approval structures. Sasol also
ensured the full remediation of SOX material weaknesses in relation to the LCCP. The leadership team’s focus can now shift to introducing
innovation and automation; building confidence with investors; and enhancing Sasol’s efforts to decarbonise our operations.
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Sasol Annual Financial Statements 2021