CONSTITUTION

The Remuneration Committee, “the Committee” is constituted as a committee of the Board of Directors of Wescoal Holdings Limited, (“the Board”) to assist the Board with regard to matters set out below. The duties and responsibilities of the members of the Committee are in addition to those as members of the board and are subject to the provisions of the Companies Act, the Company’s Memorandum of Incorporation. King IV and any other applicable law or regulatory provision in effect from time to time. The deliberations of the Committee do not reduce the individual and the collective responsibilities of the Board of Directors in regard to their fiduciary duties and responsibilities, and they must continue to exercise due skill, care and diligence in accordance with their legal obligations.

PURPOSE

The Committee does not assume the functions of management, which remain the responsibility of the executive directors, officers and other members of senior management; The primary purposes of the Remuneration Committee are: To ensure that the Wescoal Holdings Limited (“the Company”) directors and senior executives are fairly rewarded for their individual contributions to the Company’s overall performance; and To demonstrate to all stakeholders that the remuneration of senior executive members of the Company are set by a Committee of Board members who have no personal interest in the outcomes of their decisions and who will give due regard to the interests of the shareholders and to the financial and commercial health of the Company. The Remuneration Committee’s primary objectives are to:

  • Serve as a party to monitor and strengthen the objectivity and credibility of the Company’s directors and senior executive remuneration system, and
  • Make recommendations to the Board on remuneration packages and policies applicable to directors and ensure remuneration is fair, responsible and market related
  • Ensure the general remuneration increases in the group are appropriate

Ensure the disclosure of directors’ remuneration is accurate, complete and transparent To ensure best practice is applied in the implementation of the Board Approved Remuneration Policy of Wescoal, a framework that has been developed to attract, reward, retain and motivate executives, senior management and other key personnel of high calibre to lead the Group and to realise the strategic vision. The Remuneration Policy broadly sets out to:

  • Ensure rewards remain appropriate and proportionate, both relative to market and to remuneration practices within the Group.
  • To serve to align the interests of senior executives with the interests of shareholders and the business strategy as formulated by the Board.
  • To regulate how performance-based rewards are used to drive corporate performance.

MEMBERSHIP

Composition The Remuneration Committee shall be appointed by the Board and shall comply with the following membership composition guidelines:

  • Consist of at least three non-executive directors;
  • The Chairperson of the Remuneration Committee shall be a non-executive director
  • The members of the Committee as a whole must have relevant qualifications and experience to fulfil their duties
  • The Chairman of the Board, CEO, CFO and Head of HR shall attend the meetings by invitation.
  • Shall have no personal interest in the outcome of the Committee’s decisions.
  • The Quorum for any Committee meeting shall be 2 members.

Skills and Experience Requirements All members of the Committee shall have a working familiarity with remuneration and at least one member of the Committee should have a proven record in negotiating reward packages for senior management. The members of the Committee shall be knowledgeable about the affairs of the Company and where appropriate specific skills shall be represented on the Committee. Appointment The Board shall appoint the members of the Remuneration Committee. The Board shall appoint the Chairperson of the Committee from among the independent non-executive directors, failing which members of the Committee shall appoint a Chairperson of the Committee by way of majority vote of Committee members. Duration of membership Members of the Committee shall be appointed for such time as the Board requires. The Board must fill vacancies on the Committee within 40 business days after the vacancy arises. Termination The Board has to concur with any termination of the services of a person serving as a Remuneration Committee member.

AUTHORITY

The Board supports and endorses the Remuneration Committee, which operates independently of management and is free of any organisational impairment. The Remuneration Committee may obtain outside or other independent professional advice as it considers necessary to carry out its duties. The Remuneration Committee has unrestricted access to all information, including records, property and personnel of the Company, and must be provided with adequate resources in order to fulfil its responsibilities. The Remuneration Committee is authorised by the Board to:

  • Investigate any activities within its terms of reference,
  • Seek outside legal or other independent professional advice,
  • Secure the attendance of outsiders with the relevant experience and expertise where necessary at the Company’s expense, and
  • Seek any information it requires from any employee, and all employees are directed to co-operate with any requests made by the Remuneration Committee.

RESPONSIBILITIES AND ACTIVITIES

The responsibilities and duties of the Remuneration Committee shall include:

  • Annual review of the policies for and calculations of senior executives’ and directors’ remuneration to ensure that it appears reasonable;
  • Annual review of the different methods of remunerating senior executives and directors and of existing and proposed fringe benefits and share option schemes;
  • Review of retirement and termination payments and related party transactions and disclosure, if any; and
  • Make recommendations to the Board on remuneration packages and policies applicable to the directors.
  • Determine, agree and develop the company’s general policy on non-executive, executive and senior management remuneration;
  • Determine specific remuneration packages for executive directors of the company including but not limited to basic salary, benefits in kind, any annual bonuses, performance base incentives, share incentives, pension and other benefits;
  • Determine any criteria necessary to measure the performance of executive directors and senior management in discharging their functions and responsibilities;

The Committee will aim to give the executive directors and senior management every encouragement to enhance the company’s performance and to ensure that they are fairly but responsibly rewarded for their individual contributions and performance; The Committee will aim to position senior executive pay levels relative to local and international industry benchmarks such that they are sufficient to attract, retain and motivate executives of the quality required by the board. In determining the specific remuneration packages for executive directors and senior managers, the Committee will have due regard to local and international industry benchmarks; The Committee will review (at least annually) the terms and conditions of remuneration packages and service agreements for executive directors; The Committee will determine any grants to executive directors made pursuant to any share incentive scheme adopted by the company; The Group CEO will keep the Committee informed of relevant information in respect of other group executives and senior managers whose remuneration packages are not determined by the Committee; The Company Secretary will keep the Committee informed of all share transactions and shareholdings of all executive directors of the company; The Committee will co-ordinate its activities with the Chairperson of the board and the Group Chief Executive of the company as well as consult with them in formulating the Committee’s remuneration policy and when determining specific remuneration packages; The Committee may consult with the lead independent non-executive director or other non-executive directors in its evaluation of the chairperson of the Board or chief executive of the Company; In collaboration with the executive, the Committee prepares and reviews the remuneration report and policy framework to be presented at the AGM for approval (King III / King IV); The Committee plays an integral part in succession planning, particularly in respect of the chief executive director and other executive directors; Oversee the preparations and recommend to the board the remuneration report to be included in the integrated report, as to whether it: –

  • is accurate, complete and transparent;
  • provides a clear explanation of how the remuneration policy has been implemented; and
  • provides sufficient forward-looking information for the shareholders to pass a special resolution in terms of Section 66(9) of the Companies Act.

MEETINGS

Frequency The Committee will meet whenever it is necessary to make recommendations relating to the Remuneration of senior executives and executive directors. The number of meetings shall not be less than four time per year. Special meetings may be convened as required. In the absence of the Committee Chairperson the remaining members shall elect one amongst themselves to chair the meeting. Agenda and Minutes Committee members must be fully prepared for Committee meetings to be able to provide appropriate and constructive input on matters for discussion. The Chairperson of the Committee shall draw up an agenda, which shall be circulated with supporting documentation, at least six days (6 days) prior to each meeting to the members of the Committee. The Company Secretary must act as secretary to the Committee. The Company Secretary should ensure that the proceeding of the Committee meetings are properly recorded and that minutes of meetings are circulated to the Members of the Committee within 14 days manner, after the approval by the Chairperson of Committee. The minutes must be formally approved by the Committee at its next scheduled meeting. The Agenda shall be approved by the Chairperson of the Committee, and the Agenda, together with supporting documentation, must be circulated, at least six days (6 days) prior to each meeting to the members of the Committee. The Company Secretary shall distribute a meeting pack consisting of minutes of the previous meeting, the agenda and discussion or approval documents at least six days (6 days) before the meeting. Records The Committee shall establish an annual work plan for each year to ensure that all relevant matters are covered by the agendas of the meetings planned for the year. The Company Secretary shall be the custodian of all Committee documentations and records.

DIALOGUE WITH SHAREHOLDERS

The Committee shall maintain a constructive dialogue with the Company’s major shareholders on Remuneration Policy for the executive within its remit.

REPORTING RESPONSIBILITIES

The Committee shall: Update the board regularly about Committee activities and make appropriate recommendations; Prepare any reports on the Committee’s activities and the remuneration of executives as required by law or JSE Listing Requirements. Annual General Meeting The Chairperson of the Committee shall attend the Annual General meeting and shall be prepared to respond to any questions form shareholders on the Committee’s activities and decisions. Performance Assessment and Training The Committee shall review its collective performance and that of its individual members annually. A sample review template is attached hereto as Annexure 1. The office of the Company Secretary shall review annually the training requirements of the Committee and its individual members and arrange the appropriate training where necessary. Review The Committee shall review its terms of reference at the behest of the Board, due to changes in legislation affecting it, or as and when required. Biennial as a minimum cycle and the findings communicated to the Chairman of the Board. The Committee works at all times with due regard to the principles of Good Governance and in this context, seeks to achieve agreement and consensus through a consultative and participative approach that is transparent while standing accountable for its decisions.