Sasol Limited Integrated Report 2021 - Book - Page 39
1
2
3
4
5
6
Report of the Remuneration Committee (CONTINUED)
The following table provides an overview of the remuneration elements, strategic intent, application and outcomes during 2021:
Policy and strategic intent
Base salary or Total Guaranteed Package (TGP) depending on location.
Fixed pay
Broad pay bands set with reference to location and sector median benchmarks that reflect the
complexity, scope and scale of our business to ensure that we attract and retain the employees
required to drive the Group’s key objectives.
The Committee approves the cost of annual increases after considering market and economic
data as well as affordability.
Mandates are provided for salary increase negotiations with recognised trade unions and
works councils.
Strategic intent:
Short-term incentive plan
Benefits and allowances
•
•
•
•
attraction and retention of key employees;
internal equity and external competitiveness;
affordability; and
recognition of competence and/or individual performance.
Benefits include, but are not limited to, membership of a retirement plan, healthcare and risk
cover to which contributions are made by both Sasol and the employee. In South Africa, these
apply to employees outside of collective bargaining structures.
Allowances are paid in terms of statutory compliance or as are applicable in a sector/jurisdiction.
A number of special allowances including housing, cost of living, home-leave and child education
are included in the Group’s Expatriate Policy.
Strategic intent:
Application
Outcomes 2021
Employees in countries other than South Africa and employees in the South African
bargaining sectors are paid a base salary rather than a TGP.
No annual salary increases were approved for employees in July/October 2020. However, in some jurisdictions
such as the United States and Germany, multi-year agreements had to be honoured.
In South Africa, the minimum wage we pay is compared with the living wage for
a family as provided by Trading Economics. The total employment cost of salaries,
benefits, allowances and incentives for the lowest level mining employee with
three dependants on the medical scheme, is R275 904 per annum.
The Committee however agreed during H2/2021 to increase the salaries of employees below Leadership in
recognition of the outstanding efforts to achieve the Sasol 2.0 targets. The increase was linked to the market
movement in salaries over the period and was effective 1 January 2021 for employees covered by collective
bargaining agreements and on 1 April 2021 for supervisory and managerial employees, provided that the
employee had been in service since 1 January 2020 and had not received any interim or promotional adjustment
since. No member of Leadership or Executive management benefitted from this increase.
Salaries are paid monthly to all employees except for those in the United States and
Canada who receive bi-weekly payments.
Employees who are promoted are considered for salary adjustments where justified.
For employees outside the collective bargaining sectors, annual increases are processed
with effect from 1 October. These typically comprise of an across-the-board increase and a
portion at management’s discretion. Other employees receive across-the-board increases
with effect from 1 July.
From 1 May to 31 July 2020, 6 900 employees took a salary sacrifice of 10% to 24%, depending on their roles and
11 500 agreed to a pension fund employer contribution sacrifice realising ~R460 million in cash fixed cost savings.
Outside of South Africa, annual salary increases are also negotiated with trade unions
and works councils in the United States, Germany and Italy.
Benefits are offered for retirement, for reasons of sickness, disability or death.
Beneficiaries of employees who pass away while in service receive an additional
insurance pay-out. The quantum depends on which retirement plan they belonged to.
Sasol uses different options to provide healthcare to employees and their families by means of medical insurance
and/or public health plans, as well as additional insurance in countries where appropriate. All employees have
healthcare cover in the event they are infected with COVID-19.
Allowances are linked to roles within specific locations and are paid together
with salaries.
Sasol introduced special leave categories to accommodate lockdown periods in various jurisdictions. No employees
were asked to take unpaid leave because of lockdowns or the shutdown of operations due to COVID-19.
Expatriate benefits and allowances are offered in terms of country and assignment
policies.
The Committee confirmed that, in all countries where employees participate in private retirement funds,
the governance of these funds meets fiduciary requirements and all defined benefit fund liabilities are
appropriately detailed in the Sasol’s Statement of Financial Position.
• compliance with legislation or co-determination agreements;
• strengthening of the employee value proposition where benefits are offered as a general
market practice; and
• to protect cost of living for employees on expatriate assignments.
Employee wellbeing is the cornerstone of labour stability. Sasol continues to rollout
psychosocial, physical and safety culture interventions especially during this time
of COVID-19 stress and related issues such as online meeting fatigue and dealing
with the bereavement of a loved one.
For the majority of our permanent employees across the world, we apply a single STI structure.
Approved pay-outs are processed with the September salary. Most non-managerial mining
employees earn a production bonus which is processed bi-weekly, subject to safe production
against mining targets.
Every quarter, the Committee reviews YTD performance against the Group STI
scorecard to ensure ongoing relevance of targets and performance against these.
The Committee approved a Group STI scorecard focused on achieving the Future Sasol priorities. Individual
performance outcomes are applied to calculate the final incentive pay out.
An individual performance multiplier is used in a range of 0% – 150% to recognise
individual performance.
Safety and sustainability metrics, are measured at Group and Individual levels. In line with our commitment to
actively reduce carbon emissions, we included relevant incentive targets in the Group and Individual scorecards
which align with our climate change roadmap. Where appropriate and within line of sight, we included the following
targets in individual performance scorecards:
Target incentives align with the market median.
Typically the STI structure consists of Group, BU or Function and individual performance targets
set in advance of every financial year.
No BU or Functional STI scorecards were used during 2021.
Where employer contributions were suspended to retirement funds, this applied for the period May 2020 –
July 2020. They were then reinstated due to Sasol’s improved liquidity position at the time.
Strategic intent:
•
•
•
•
• to remain competitive with the market; and
• incentivise achievement of short-term targets.
These metrics balance safety, environmental sustainability, financial and operational performance criteria.
Any fatality reduces the final incentive score by 3 percentage points.
The Committee can exercise its discretion to vary incentive outcomes as deemed appropriate,
and based on affordability.
safe transportation of hazardous chemicals;
occupational health measures;
carbon emissions; and
leaks or spills of hazardous materials.
Long-term incentive plan
Group STI performance outcomes for 2021 are set out on page 40.
Equity- or cash-settled awards are granted annually or upon promotion to an eligible level, where
the underlying value is tied to the market value of a Sasol ordinary share (or American Depository
Receipts (ADR) for international participants), subject to vesting conditions.
Annual awards are made with reference to a percentage of base salary or TGP, which is level
dependent, the eligible employee’s performance over the preceding year and the organisation’s
requirement for skills retention.
Vesting of awards is subject to the achievement of corporate performance targets (CPTs) and/or
service criteria.
LTIs form an important part of our reward mix and target awards are reviewed annually
to ensure ongoing market competitiveness.
100% of the LTIs awarded to members of the GEC in 2018 are subject to the achievement of performance metrics
over the period 2018 – 2021, of which 50% of the vested award becomes available in September 2021.
Participants may sell or retain the vested shares once vesting conditions are met.
Minimum shareholding requirements are in place for Executive Directors and
Prescribed Officers.
The overall performance of the 2018 LTI awards to the GEC was 44,7%. 22,3% of the award granted in 2018 will
vest in September 2021 and the balance will vest in 2023. Participants who leave the Group for reasons other
than retirement, retrenchment, death, disability or ill health, or for any other reason approved by the Committee,
will forfeit unvested awards.
The Committee annually reviews the LTI targets to ensure continued alignment
with key priorities.
The vesting period is three years for participants in Leadership and Senior Management.
A split vesting period of three to five years applies to participants in Top Management.
Strategic intent:
• attraction and retention of senior employees and scarce and critical skills; and
• alignment with shareholders’ long-term interests with reference to the Sasol share price and
the underlying performance metrics.
To retain top talent, the Committee decided that 35% of the annual award made to GEC members in
December 2020 should be time based only in the form of restricted shares, with a vesting period of five
years. The rest of the on-target award (65%) will vest on achievement of time and performance conditions,
over a three- and five-year vesting period. The introduction of restricted share awards reduced the maximum
potential outcome of LTIs. The target awards, for the CEO and the CFO, were reduced considering the
introduction of restricted shares in the LTI portfolio. The introduction of Restricted Shares also supports the
requirement for minimum shareholding requirements which were introduced for all Prescribed Officers from
2021. This requirement was previously only in place for Executive Directors.
GEC LTI performance outcomes for 2021 are set out on page 40.
38
Sasol Integrated Report 2021