Sasol Limited Integrated Report 2021 - Book - Page 40
1
2
3
4
5
6
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. 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:
Annual Non-Executive Directors’ fees: actual vs approved vs proposed:
• 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; and
• there is no accelerated vesting of LTIs at retirement and the
vesting periods of three and five 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.
Average increase budgets approved: F18 – FY21
30
Unionised staff annual
increase budget %
Executive annual increase
budget %
Cumulative 2021
2020
2019
2018
Non-Executive Directors’ fees
Non-Executive Directors are appointed to the Sasol Limited Board
based on their competencies as well as insight and experience
appropriate to assist the Group in setting the long-term strategy,
providing independent oversight in respect of performance against
key priorities and holding executives accountable to deliver business
results over the short, medium and long term. Consequently,
fees are set at levels to attract and retain the calibre of directors
necessary to contribute to a highly effective board of a complex,
multi-dimensional and multi-national organisation. Non-Executive
Directors do not receive STIs, nor do they participate in LTI plans.
No arrangement exists for compensation in respect of loss of office.
Board fees tabled at the 2020 AGM for shareholder approval, were
unchanged from what was previously approved by shareholders in
2018. The 2018 structure was intended for a phased implementation
over the 2018 – 2021 period. However, following the devastating
effects of COVID-19 and 2020 macroeconomic developments
on Sasol’s financial results, we paused the implementation of
further fee adjustments for South Africa-domiciled Directors.
Furthermore, Directors agreed to a sacrifice of at least 20% of
Board and Committee fees for the period May to September 2020
and a sacrifice of 20% on Board fees for the period October 2020
to November 2021.
Non-Executive Directors are paid a fixed annual fee in respect of their
Board membership and supplementary fees for Board Committee
membership or chairmanship. The annual fee is divided by four and
a quarterly fee is paid at the end of every board cycle regardless of
the number of meetings held in that quarter. A travel allowance was
approved by shareholders in 2018 compensating for time lost due to
international travel; however, this was never implemented.
During 2021, we reconsidered the approach towards setting
Non-Executive Directors fees. Following extensive review, the
Committee agreed to table for shareholder approval at the
November 2021 AGM a revised fee proposal where a cost-of-living
(COL) factor is applied to the fees payable to NEDs who live outside
of Europe, the United Kingdom and North America and to fix the
exchange rate that will be used to convert the dollar denominated
fees to the denomination used for payment in order to eliminate
significant exchange rate variances. The travel allowance will no
longer be pursued.
39
Proposed Chairman
fees 202212, 13
Proposed Board
United Kingdom, Europe,
North America
member fees 202212, 13
South Africadomiciled fees
Actual fees2, 6
Domiciled
outside
UK,
Europe,
North
America
Domiciled
in UK,
Europe,
North
America
Domiciled
outside
UK,
Europe,
North
America
Chairman
Approved
fees1, 2
Board
member
Approved
fees2, 3
Chair
Member
Domiciled
in UK,
Europe,
North
America
$445 000
$150 000
–
$138 0008, 11
$351 8059
$112 00010
$345 000
$285 000
$120 000
$100 000
Audit Committee
$25 000
$20 000
–
$31 050
$25 000
$20 000
$35 000
$30 000
$24 000
$20 000
Remuneration
Committee
$20 000
$12 000
–
$23 575
$20 000
$12 000
$24 000
$20 000
$14 500
$12 000
Capital Investment
Committee
$16 000
$11 000
$42 550
$21 275
–
$11 000
$24 000
$20 000
$14 500
$12 000
Nomination and
Governance Committee
$16 000
$11 000
–
$21 275
–
$11 000
$24 000
$20 000
$14 500
$12 000
Safety, Social and Ethics
Committee
$16 000
$11 000
$42 550
$21 275
–
$11 000
$24 000
$20 000
$14 500
$12 000
Other Committees14
Board
Member
Chair
$16 000
$11 000
–
$21 275
–
$11 000
$24 000
$20 000
$14 500
$12 000
Lead Independent
Director
–
$40 000
–
$60 375
–
–
–
–
$48 000
$40 000
Travel allowance – Less
than 10 hours travel4
–
$5 000
–
–
–
–
–
n/a
–
n/a
Travel allowance –
Between 10 and 15 hours
travel⁴
–
$10 000
–
–
–
–
–
n/a
–
n/a
Travel allowance – More
than 15 hours travel⁴
–
$15 000
–
–
–
–
–
n/a
–
n/a
$2 000
$2 000
$2 000
$2 000
$2 000
$2 000
–
Special purpose
ad hoc Committees –
per meeting⁵
15
0
Non-South Africadomiciled fees
Actual fees2, 6, 7
1. Chairman of the Board fee, inclusive of all fees payable for attendance or membership of Board Committees and directorship of the Company.
2. Fees including VAT were intended for a phased implementation over the period 2018 – 2021.
3. For the fee structure applicable from 16 November 2018 for non-South African-resident Non-Executive Directors, the following rules apply: where the total prior year
fees inclusive of VAT (on a like-for-like basis) are higher than the new structure, the previous fee will be retained to ensure that the Non-Executive Directors
is not financially worse off with the implementation of the new fee structure. Therefore, these fees are still higher than the fees paid to South Africa-domiciled
Non-Executive Directors.
4. Travel allowance was intended for implementation when international travel is required but never implemented.
5. Special ad hoc committees approved by the Board to provide oversight over strategic matters of a temporary nature.
6. Fee sacrifice agreed on Board fees as per 18 November 2020 SENS announcement.
7. VAT is not applicable. Non-Executive Directors who were appointed on the 2016 approved fee structure, whose fees would be negatively impacted by the 2018 fees,
were grandfathered.
8. Fee sacrifice applied. Approved fee incl VAT is $172,500.
9. Fee sacrifice applied. Approved fee incl VAT is $445,000.
10. Fee sacrifice applied. Approved fee incl VAT is $140,000.
11. Board fee for non-South Africa-domiciled members who joined the Board from 1 April 2020 is $142,500 incl VAT with the 20% sacrifice applied.
12. Fees to be tabled for approval by shareholders at the November 2021 AGM and effective from 1 January 2022. Fees stated exclusive of VAT for consistent reporting
purposes. A COL factor applied to the Non-Executive Directors fees for directors domiciled outside of Europe, the United Kingdom and North America. A fixed
exchange rate will be applied when converted for payment to the relevant currency. An annual inflationary linked increase to be applied after 12 months.
13. Where Non-Executive Directors are required to travel to a meeting location, associated travel and accommodation costs are covered by Sasol.
14. Other Committees will be paid on a quarterly basis for any Committee meetings approved by the Board but not specified in this table.
Sasol Integrated Report 2021