| |
Remuneration philosophy and policy |
The board recognises the importance of people to the continued sustainability and growth of the group. Oversight is therefore maintained over the remuneration policy and the implementation thereof to ensure rewards are competitive and proportionate with the contribution to the group’s performance. As a principle, above average remuneration is awarded to those employees who add significant value as gauged through achievement of performance results.
The executive and key managers’ remuneration is therefore structured to ensure that a significant portion of their package is linked to performance and achievement of sustainability targets through short-term and long-term incentives.
The board does not intend to ask the shareholders for non-binding approval for the group’s remuneration policies. The rationale and basis for the group’s executive remuneration policy is carefully considered by the remuneration/nomination committee and is documented in the annual report. Shareholders with concerns regarding this policy should contact the chairman of either the board or the committee. |
| |
Remuneration governance |
| The remuneration/nomination committee is composed of non-executive directors tasked with operating on behalf of the board to ensure the alignment of remuneration with realising shareholder value. |
| |
Share incentive schemes |
Share option scheme |
Grindrod has a share option scheme as an incentive to the senior management employees of the group. At the annual general meeting in May 2010, it was resolved that the unissued shares in the share capital of the company reserved for the purpose of the share option scheme continue to be placed under the control of the directors. The aggregate number of shares which are reserved for the scheme, together with the shares under option, is 90 000 000. These shares represent 3% of the authorised share capital and approximately 20% of the issued share capital as at 31 December 2010, excluding treasury shares.
After taking into account options which have lapsed and options withdrawn in respect of retired employees and employees who have left the group, the balance of the options which have been granted is 40 960 000 shares (equivalent to 9% of the issued share capital), of which 37 060 000 shares have been exercised and issued, leaving 3 900 000 shares (equivalent to 0,8% of the issued share capital excluding treasury shares) still under option in terms of the scheme at 31 December 2010. The options are exercisable at the market prices ruling on the dates the options were granted and vary from 239 cents to 1 251 cents per ordinary share and at varying dates before November 2015.
1 600 000 ordinary shares were allotted during the year in terms of the scheme for a consideration of R8 692 000.
Details of share options granted but not yet exercised are: |
| |
| Date option granted |
Expiry date |
Number of options |
Subscription price (cents) |
| 26.11.2003 |
26.11.2013 |
750 000 |
239 |
| 27.05.2004 |
27.05.2014 |
100 000 |
380 |
| 23.11.2005 |
23.11.2015 |
3 050 000 |
1 251 |
|
|
| |
| There were no options granted under this scheme in 2010. |
| |
Share price linked option scheme |
The group share price linked share option scheme was introduced in 2007 for executives and other key senior managers in place of the aforementioned share option scheme.
Whilst the rules of the new scheme are modelled on those of the option scheme, the important difference is that options under the new scheme are cash settled rather than equity settled. One-third of the options become vested on each of the third, fourth and fifth anniversaries of the relevant grant date. The options do not have an expiry date beyond the vesting date.
In terms of the rules of the new scheme, the grant price of an option is determined on the same basis as the settlement price, i.e. the average of the closing price of the previous seven trading days. The cash settlement amount of an option is equal to the difference between the weighted average price of Grindrod shares on the date upon which an option vests and the grant price. The participants will receive the amount due as a cash bonus.
The advantages to the company in adopting the new scheme include: |
| • |
no necessity to issue new shares when options are exercised, i.e. no share dilution; |
| • |
ease of administration; and |
| • |
tax effectiveness of the expense in the hands of the company. |
|
| |
The remuneration/nomination committee recommends the granting of options for approval by the board of Grindrod Limited.
Options granted to executive directors and senior management as at 31 December 2010 comprise: |
| |
| Date option granted |
Number of options granted |
Price (cents) |
| 2007 |
1 475 000 |
1 625 |
| 2007 |
1 148 000 |
2 400 |
| 2008 |
2 348 600 |
2 350 |
| 2008 |
93 000 |
2 822 |
| 2009 |
3 749 000 |
1 430 |
| 2010 |
4 117 000 |
1 395 |
|
|
| |
Grindrod Bank share price linked option scheme |
| In 2009, a share price linked scheme was introduced for Grindrod Bank executives and key employees. The scheme operates on the same principle as the Grindrod Limited share price linked option scheme, with the exception of the share price being based on a combined net asset value of Grindrod Bank and related financial services entities as opposed to the Grindrod listed price. |
| |
Non-executive directors’ remuneration |
The level of fees paid to non-executive directors is reviewed by the remuneration/nomination committee on an annual basis. The recommendations are submitted to the Grindrod board for consideration and the fees are approved in advance by the shareholders at the annual general meeting. Various market surveys are utilised to determine the remuneration levels and reference is made to the fees paid by comparable listed companies.
Non-executive directors do not participate in the group’s incentive bonus plan or share option scheme, however, IAJ Clark continues to hold options granted during his tenure as chief executive officer. |
| |
Directors’ emoluments |
| The remuneration paid to directors of the company, whilst in office, during the year ended 31 December 2010 is as follows: |
| |
| |
Directors’
fees
R000 |
Committee
fees
R000 |
Basic
remuneration
R000 |
Performance
bonus
R000 |
Retirement,
medical
and other
benefits
R000 |
Share
option
gains
R000 |
Total
2010
R000 |
Total
2009
R000 |
| Executive directors |
|
|
|
|
|
|
|
|
| JG Jones** |
|
|
|
|
|
|
– |
5 797 |
| TJT McClure** |
|
|
|
|
|
|
– |
7 518 |
|
|
|
|
|
|
|
|
|
| AK Olivier** |
|
|
1 241 |
2 541 |
|
|
3 782 |
8 644 |
| DA Rennie** |
|
|
|
|
|
|
– |
6 717 |
| AF Stewart** |
|
|
744 |
1 869 |
127 |
|
2 740 |
13 996 |
| LR Stuart-Hill** |
|
|
|
|
|
|
– |
8 187 |
| Non-executive directors |
|
|
|
|
|
|
|
|
| IAJ Clark |
360 |
38 |
|
|
47 |
4 689 |
5 134 |
7 596 |
| H Adams |
153 |
|
|
|
|
|
153 |
128 |
| MR Faku* |
158 |
|
|
|
|
|
158 |
– |
| WD Geach |
153 |
43 |
|
|
|
|
196 |
201 |
| IM Groves |
153 |
98 |
|
|
47 |
|
298 |
280 |
| MJ Hankinson* |
158 |
60 |
|
|
|
|
218 |
– |
| RA Norton |
56 |
34 |
|
|
|
|
90 |
203 |
|
|
|
|
|
|
|
|
| NTY Siwendu |
|
|
|
|
|
|
– |
153 |
|
|
|
|
|
|
|
|
|
| SDM Zungu* |
158 |
|
|
|
|
|
158 |
– |
| From the company |
|
|
|
|
|
|
12 927 |
59 420 |
| Executive directors |
|
|
|
|
|
|
|
|
| JG Jones** |
|
|
1 765 |
1 040 |
524 |
360 |
5 689 |
1 733 |
| TJT McClure** |
|
|
1 948 |
1 266 |
8 595 |
224 |
12 033 |
33 540 |
|
|
|
|
|
|
|
|
| DA Polkinghorne** |
|
|
1 861 |
1 508 |
388 |
|
3 757 |
3 732 |
| DA Rennie** |
|
|
2 421 |
2 194 |
816 |
2 360 |
7 791 |
2 437 |
| AK Olivier** |
|
|
3 972 |
1 319 |
247 |
|
5 538 |
2 498 |
| AF Stewart** |
|
|
1 258 |
|
774 |
|
2 032 |
|
| LR Stuart-Hill** |
|
|
2 596 |
1 559 |
878 |
4 812 |
9 845 |
2 436 |
| Non-executive directors |
|
|
|
|
|
|
|
|
| IAJ Clark |
78 |
12 |
|
|
|
|
90 |
79 |
| WD Geach |
23 |
15 |
|
|
|
|
38 |
– |
| IM Groves |
53 |
89 |
|
|
|
|
142 |
113 |
| RA Norton |
21 |
47 |
|
|
|
|
68 |
150 |
|
|
|
|
|
|
|
|
|
| NTY Siwendu |
|
|
|
|
|
|
– |
70 |
|
|
|
|
|
|
|
|
|
| From the subsidiaries |
|
|
|
|
|
|
47 023 |
46 788 |
| Total emoluments |
|
|
|
|
|
|
59 950 |
106 208 |
|
|
| |
Share option scheme and share price linked option scheme |
| Details of share options and share price linked option shares granted to directors and not exercised are set out below. View details of these two schemes. |
| |
Share option scheme |
| Director |
Options at
01.01.2010 |
Options
exercised
during
the year |
Price at
which
options
exercised
(cents) |
Options at
31.12.2010 |
Option
price
(cents) |
Vesting
dates |
Expiry
dates |
| IAJ Clark |
200 000 |
200 000 |
239 |
– |
|
|
|
|
200 000 |
100 000 |
380 |
100 000 |
380 |
27.05.2011 |
27.05.2014 |
|
600 000 |
300 000 |
1 251 |
150 000 |
1 251 |
23.11.2011 |
23.11.2015 |
| |
|
|
|
150 000 |
1 251 |
23.11.2012 |
23.11.2015 |
| JG Jones |
150 000 |
150 000 |
239 |
– |
|
|
|
|
500 000 |
|
251 |
100 000 |
1 251 |
23.11.2008 |
23.11.2015 |
|
|
|
|
100 000 |
1 251 |
23.11.2009 |
23.11.2015 |
|
|
|
|
100 000 |
1 251 |
23.11.2010 |
23.11.2015 |
|
|
|
|
100 000 |
1 251 |
23.11.2011 |
23.11.2015 |
| |
|
|
|
100 000 |
1 251 |
23.11.2012 |
23.11.2015 |
| AK Olivier |
400 000 |
|
239 |
200 000 |
239 |
26.11.2009 |
26.11.2013 |
|
|
|
|
200 000 |
239 |
26.11.2010 |
26.11.2013 |
|
400 000 |
|
1 251 |
100 000 |
1 251 |
23.11.2009 |
23.11.2015 |
|
|
|
|
100 000 |
1 251 |
23.11.2010 |
23.11.2015 |
|
|
|
|
100 000 |
1 251 |
23.11.2011 |
23.11.2015 |
| |
|
|
|
100 000 |
1 251 |
23.11.2012 |
23.11.2015 |
|
|
|
|
|
|
|
|
| DA Rennie |
150 000 |
150 000 |
239 |
– |
|
|
|
|
500 000 |
|
1 251 |
100 000 |
1 251 |
23.11.2008 |
23.11.2015 |
|
|
|
|
100 000 |
1 251 |
23.11.2009 |
23.11.2015 |
|
|
|
|
100 000 |
1 251 |
23.11.2010 |
23.11.2015 |
|
|
|
|
100 000 |
1 251 |
23.11.2011 |
23.11.2015 |
| |
|
|
|
100 000 |
1 251 |
23.11.2012 |
23.11.2015 |
| AF Stewart |
150 000 |
|
239 |
150 000 |
239 |
26.11.2010 |
26.11.2013 |
|
500 000 |
|
1 251 |
100 000 |
1 251 |
23.11.2008 |
23.11.2015 |
|
|
|
|
100 000 |
1 251 |
23.11.2009 |
23.11.2015 |
|
|
|
|
100 000 |
1 251 |
23.11.2010 |
23.11.2015 |
|
|
|
|
100 000 |
1 251 |
23.11.2011 |
23.11.2015 |
| |
|
|
|
100 000 |
1 251 |
23.11.2012 |
23.11.2015 |
| LR Stuart-Hill |
200 000 |
200 000 |
239 |
– |
|
|
|
|
400 000 |
200 000 |
1 251 |
100 000 |
1 251 |
23.11.2011 |
23.11.2015 |
| |
|
|
|
100 000 |
1 251 |
23.11.2012 |
23.11.2015 |
|
4 350 000 |
1 300 000 |
|
3 050 000 |
|
|
|
|
| |
Share price linked options scheme |
| Director |
Options at
01.01.2010 |
Options
granted
during
the year |
Options
vested
during
the year |
Vesting
price
(cents) |
Options at
31.12.2010 |
Option price (cents) |
Vesting
dates |
| JG Jones |
220 000 |
|
|
|
17 600 |
2 350 |
01.03.2011 |
|
|
|
|
|
17 600 |
2 350 |
01.03.2012 |
|
|
|
|
|
17 800 |
2 350 |
01.03.2013 |
|
|
|
|
|
55 600 |
1 430 |
01.03.2012 |
|
|
|
|
|
55 600 |
1 430 |
01.03.2013 |
|
|
|
|
|
55 800 |
1 430 |
01.03.2014 |
|
|
171 000 |
|
|
57 000 |
1 395 |
01.03.2013 |
|
|
|
|
|
57 000 |
1 395 |
01.03.2014 |
| |
|
|
|
|
57 000 |
1 395 |
01.03.2015 |
| AK Olivier |
1 360 000 |
|
283 300 |
1 395 |
– |
1 625 |
01.03.2010 |
|
|
|
|
|
283 300 |
1 625 |
01.03.2011 |
|
|
|
|
|
283 400 |
1 625 |
01.03.2012 |
|
|
|
|
|
62 000 |
2 350 |
01.03.2011 |
|
|
|
|
|
62 000 |
2 350 |
01.03.2012 |
|
|
|
|
|
62 000 |
2 350 |
01.03.2013 |
|
|
|
|
|
108 000 |
1 430 |
01.03.2012 |
|
|
|
|
|
108 000 |
1 430 |
01.03.2013 |
|
|
|
|
|
108 000 |
1 430 |
01.03.2014 |
|
|
688 000 |
|
|
229 300 |
1 395 |
01.03.2013 |
|
|
|
|
|
229 300 |
1 395 |
01.03.2014 |
| |
|
|
|
|
229 400 |
1 395 |
01.03.2015 |
| DA Polkinghorne |
285 000 |
|
51 600 |
1 395 |
– |
1 625 |
01.03.2010 |
|
|
|
|
|
51 600 |
1 625 |
01.03.2011 |
|
|
|
|
|
51 800 |
1 625 |
01.03.2012 |
|
|
|
|
|
43 300 |
2 350 |
01.03.2011 |
|
|
|
|
|
43 300 |
2 350 |
01.03.2012 |
| |
|
|
|
|
43 400 |
2 350 |
01.03.2013 |
| DA Rennie |
445 000 |
|
51 600 |
1 395 |
– |
1 625 |
01.03.2010 |
|
|
|
|
|
51 600 |
1 625 |
01.03.2011 |
|
|
|
|
|
51 800 |
1 625 |
01.03.2012 |
|
|
|
|
|
28 000 |
2 350 |
01.03.2011 |
|
|
|
|
|
28 000 |
2 350 |
01.03.2012 |
|
|
|
|
|
28 000 |
2 350 |
01.03.2013 |
|
|
|
|
|
68 600 |
1 430 |
01.03.2012 |
|
|
|
|
|
68 600 |
1 430 |
01.03.2013 |
|
|
|
|
|
68 800 |
1 430 |
01.03.2014 |
|
|
264 000 |
|
|
88 000 |
1 395 |
01.03.2013 |
|
|
|
|
|
88 000 |
1 395 |
01.03.2014 |
| |
|
|
|
|
88 000 |
1 395 |
01.03.2015 |
| AF Stewart |
348 000 |
|
16 600 |
1 395 |
– |
1 625 |
01.03.2010 |
|
|
|
|
|
16 600 |
1 625 |
01.03.2011 |
|
|
|
|
|
16 800 |
1 625 |
01.03.2012 |
|
|
|
|
|
31 300 |
2 350 |
01.03.2011 |
|
|
|
|
|
31 300 |
2 350 |
01.03.2012 |
|
|
|
|
|
31 400 |
2 350 |
01.03.2013 |
|
|
|
|
|
68 000 |
1 430 |
01.03.2012 |
|
|
|
|
|
68 000 |
1 430 |
01.03.2013 |
|
|
|
|
|
68 000 |
1 430 |
01.03.2014 |
|
|
251 000 |
|
|
83 600 |
1 395 |
01.03.2013 |
|
|
|
|
|
83 700 |
1 395 |
01.03.2014 |
| |
|
|
|
|
83 700 |
1 395 |
01.03.2015 |
| LR Stuart-Hill |
444 000 |
|
45 000 |
1 395 |
– |
1 625 |
01.03.2010 |
|
|
|
|
|
45 000 |
1 625 |
01.03.2011 |
|
|
|
|
|
45 000 |
1 625 |
01.03.2012 |
|
|
|
|
|
29 300 |
2 350 |
01.03.2011 |
|
|
|
|
|
29 300 |
2 350 |
01.03.2012 |
|
|
|
|
|
29 400 |
2 350 |
01.03.2013 |
|
|
|
|
|
73 600 |
1 430 |
01.03.2012 |
|
|
|
|
|
73 600 |
1 430 |
01.03.2013 |
|
|
|
|
|
73 800 |
1 430 |
01.03.2014 |
|
|
522 000 |
|
|
174 000 |
1 395 |
01.03.2013 |
|
|
|
|
|
174 000 |
1 395 |
01.03.2014 |
| |
|
|
|
|
174 000 |
1 395 |
01.03.2015 |
|
3 102 000 |
1 896 000 |
448 100 |
|
4 549 900 |
|
|
|
| |
| No bonus payments were paid on options which vested in 2010, due to the share price being below the grant price of the shares vested, however, R224 000 was paid to TJT McClure on his retirement on 31 July 2010 in terms of the rules of the scheme. |
| |
Grindrod Bank Limited share price linked options scheme |
| Director |
Options at
01.01.2010 |
Options
granted
during
the year |
Options at
31.12.2010 |
Option price (cents) |
Vesting
dates |
| DA Polkinghorne |
447 000 |
|
149 000 |
466 |
01.03.2012 |
|
|
|
149 000 |
466 |
01.03.2013 |
|
|
|
149 000 |
466 |
01.03.2014 |
|
|
249 000 |
83 000 |
499 |
01.03.2013 |
|
|
|
83 000 |
499 |
01.03.2014 |
| |
|
|
83 000 |
499 |
01.03.2015 |
|
447 000 |
249 000 |
696 000 |
|
|
|
| |
| The option price in respect of each of the Grindrod Bank scheme shares is based on a combined net asset value of the Financial Services division. |
| |
Directors’ interest in the company |
| At 31 December 2010, the directors held ordinary shares in the company as follows: |
| |
| Director |
2010
Beneficial indirect |
2009
Beneficial indirect |
| IAJ Clark |
5 719 900 |
5 119 900 |
| IM Groves (1) |
1 298 947 |
1 500 000 |
| MJ Hankinson |
5 000 |
5 000 |
| AK Olivier |
1 634 250 |
1 634 250 |
| DA Rennie |
750 000 |
600 000 |
| AF Stewart (2) |
632 050 |
980 000 |
| LR Stuart-Hill |
8 500 |
628 500 |
| Aggregate |
10 048 647 |
10 467 650 |
|
| |
| Zero cost collar options have been entered into in respect of the following: |
| |
| Note |
Number of shares |
Put strike
(R) |
Call strike
(R) |
Maturity date |
| (1) |
298 947 |
18,50 |
20,68 |
06.12.2013 |
| (2) |
320 000 |
15,57 |
25,37 |
30.11.2011 |
|
| |
| At 31 December 2010, the directors held preference shares in the company as follows: |
| |
| |
2010 |
2009 |
| Director |
Beneficial
indirect |
Non-beneficial indirect |
Beneficial
indirect |
Non-beneficial
indirect |
| IAJ Clark |
205 931 |
– |
205 931 |
– |
| IM Groves |
15 000 |
– |
15 000 |
– |
| JG Jones |
20 000 |
4 000 |
20 000 |
4 000 |
| DA Rennie |
– |
10 000 |
– |
10 000 |
| LR Stuart-Hill |
13 800 |
– |
13 800 |
– |
| Aggregate |
254 731 |
14 000 |
254 731 |
14 000 |
|
| |
There were no direct beneficial holdings in the current or prior year.
These ordinary and preference shareholdings were unchanged at 23 February 2011. |
| |
General remuneration |
Remuneration packages are established for each job based on their relative value using an international system of evaluation and are assessed for competitiveness regularly. Improvements in packages are driven by individual and consequently business performance.
The group’s salary/wage bill including incentive bonuses and profit share incentives for the reporting year and for 2010 per occupation level for temporary and permanent staff was as follows: |
| |
R000
Occupational level |
2010 |
2009 |
| Permanent |
Temporary |
Total |
Permanent |
Temporary |
Total |
| Top management |
104 072 |
1 182 |
105 254 |
92 592 |
18 421 |
111 013 |
| Senior management |
190 507 |
2 182 |
192 689 |
194 026 |
13 014 |
207 040 |
| Middle management |
187 961 |
6 508 |
194 469 |
178 693 |
16 338 |
195 031 |
| Skilled |
250 562 |
7 665 |
258 227 |
242 017 |
12 359 |
254 376 |
| Semi-skilled |
176 669 |
28 663 |
205 332 |
252 414 |
28 621 |
281 035 |
| Least skilled |
28 550 |
3 080 |
31 630 |
29 996 |
12 798 |
42 794 |
| Total |
938 321 |
49 280 |
987 601 |
989 738 |
101 551 |
1 091 289 |
|