This spread supplements the discussion from the chairperson of the remuneration committee on page 67 with detailed information around remuneration practices and board and senior management remuneration.

Introduction

As outlined on pages 36 to 41, the performance of the board and our team is appraised against a set of clear objectives. Executive and senior management are measured and remunerated against a balanced scorecard aligned to people, the environment and group and individual performance.

• Remuneration policy

  Group Five believes in rewarding performance. Its remuneration policy therefore aims to attract, reward, motivate and retain skilled employees to execute current strategies and deliverables and to create long term organisational growth. It provides an integrated remuneration and reward model which is compared to the market from which it attracts and recruits employees with the skills required by the organisation. Our approach is to pay on the market or above. We offer an integrated approach to remuneration.

  Remuneration practices

  Below is a summary of the group’s remuneration practices.

  GROUP FIVE INTEGRATED APPROACH
  Elements			GROUP FIVE		Strategic intent
  	Long term Incentive		Share options		Long term company performance Attraction/retention
  	Short term Incentive		Annual bonus scheme		Company performance Individual performance Attraction/retention
  	Base pay		Monthly salary Hourly wage		Skills Knowledge Competencies Experience Attraction/retention Individual performance
  	Benefits		Medical aid Pension fund/provident fund Death benefit Car allowance
  	Tools		Company cars     Computers/laptops     Cellphones		Job requirement

• Variable pay

  Long term incentives

  The group has long term incentive share schemes in place.

  Management share scheme

  Share appreciation rights (SARs) are allocated to executive and business unit directors. The intention of this scheme is to attract, retain and reward participants who are able to influence the group’s performance. The allocations are based on seniority in accordance to an annual multiple of individual guaranteed earnings.

  Employee category		Annual multiple of guaranteed earnings (AMOGE)*
  CEO		1.5
  Executive committee members		1.2
  Managing directors of business units		0.9
  Business unit directors (other than managing directors)		0.6

  *	The SARs issued are based on AMOGE, which is the value of the shares based on the 30-day volume adjusted weighted average price in the 30 days prior to the issue, expressed as a multiple of the employee’s annual cost to company package.

  No specific performance criteria are stipulated, although it is expected that employees who are granted these shares are employees who have and will continue to meet or exceed expectations.

  The SARs scheme has been in existence for the last five years. A key issue for the scheme has been the slow appreciation of share value especially in tough market conditions. This lack of share appreciation limits the scheme’s intent of motivating and retaining the participants of the scheme. To address this, a number of alternatives have been reviewed to address the current shortcomings of the scheme. These will be discussed further in F2012. Should a conclusion be reached on a new scheme, a circular will be issued to shareholders for their consideration.

  Black management share scheme

  The black management share scheme formed part of the group’s initial BBBEE empowerment transaction in 2005. Allocations in terms of this scheme are made to black (Black, Indian and Coloured) managers in Peromnes grades 8 and higher, which represents middle management and above.

  The scheme serves as an attraction to black managers to join and remain with the group. The shares are allocated in accordance with the trust rules set up at the time of launching the scheme. The allocation is based on a targeted annual multiple of guaranteed earnings, which may be adjusted by the remuneration committee based on the availability of shares for allocation and the number of participants.

  Peromnes grade		Annual multiple of guaranteed earnings (AMOGE)*
  Grade 5		2.0
  Grade 6		1.5
  Grade 7		1
  Grade 8		0.75

  *	The shares issued are based on AMOGE, which is the value of the shares based on the 30-day volume adjusted weighted average price in the 30 days prior to the issue, expressed as a multiple of the employee’s annual cost to company package.

  As the black management share scheme was part of the group’s BBBEE empowerment transaction in 2005, no specific performance criteria was required. However, it is accepted that employees who are granted these shares are employees who have and will continue to meet or exceed expectations. Refer to page 228 of the annual financial statements for additional information.

  The scheme terminates in calendar 2012 by which time all shares in the trust need to be allocated to black managers. At that time the board will be required to establish whether to renew the scheme or to create a new programme as part of a future transaction.

  Short term incentives

  The group grants employees annual performance bonuses. These are based on group, business unit, project and individual performance over the financial year of the company. See pages 40 to 41 for the key performance areas used to assess senior management’s incentive bonus entitlement. Employees are measured against a set of individual, job or site-specific criteria. When these are met or exceeded, a bonus is paid. Executives can earn up to three times their cost to company should they exceed their performance targets.

• Cost to company

  Base pay

  Group Five benchmarks its remuneration practices against both the market from which it recruits and the most relevant markets where employees regularly seek alternative employment. We utilise a number of benchmark remuneration surveys to ensure our remuneration packages are both competitive and fair. We aim to pay our executives at the median of the market and employees at the 62th percentile.

  The group follows a job grading system, which includes paying salaried employees at a level which meets market expectations for the particular job category. Our wage-based employees are paid either in line with a sectoral determination set out by the Department of Labour or in line with a union-negotiated wage.

  Benefits

  Group Five offers a number of employee benefits, as approved by the remuneration committee. These include medical aid, pension, provident fund and death benefits. These are also based on market trends and competitiveness.

• Director and senior management remuneration

  Non-executive directors’ fees

  	Fees, services and expenses	Fees 30 June 2011 (R’000)		Expenses 30 June 2011 (R’000)		Total 30 June 2011 (R’000)		Fees 30 June 2010 (R’000)		Expenses 30 June 2010 (R’000)		Total 30 June 2010 (R’000)
  	Name
  	P Buthelezi	740		–		740		719		–		719
  	L Chalker	550		223		773		510		214		724
  	SG Morris	944		–		944		547		–		547
  	KK Mpinga	494		–		494		383		–		383
  	MSV Gantsho#	–		–		–		91		–		91
  	LE Bakoro	394		–		394		318		–		318
  	JL Job	524		–		524		353		–		353
  	Z Motshotshisa~	–		–		–		200		–		200
  		3 646		223		3 869		3 121		214		3 335

  # Resigned in January 2010.
  ~ Appointed in June 2009.
  †† Resigned in May 2010.

  Non-executive directors’ proposed fees F2012, subject to shareholder approval

  Position	F2012 proposed fees (R per annum)			Comment		F2011 approved fees (R per annum)
  Main board – chairperson	739 450			Includes all board and committee		697 600
  				attendances
  Lead independent non-executive director	318 000			Includes basic fee plus attendance		300 000#
  				fee for four meetings
  Main board – non-executive director	184 440			Includes basic fee plus attendance		174 000
  				fee for four meetings
  Audit committee – chairperson	184 440			Four meetings		174 400
  Audit committee – member and attendee	92 430			Four meetings		87 200
  Remuneration committee – chairperson	92 430			Four meetings		87 200
  Remuneration committee – member and attendee	64 660			Four meetings		46 000
  Risk committee – chairperson	122 960			Four meetings		116 000
  Risk committee – member and attendee	64 660			Four meetings		61 000
  Nominations committee – chairperson*	92 430			Two meetings		87 200
  Nominations committee – member and attendee	48 760			Two meetings		46 000
  SED committee – chairperson	122 960			Four meetings		116 000
  SED committee – member and attendee	64 660			Four meetings		61 000
  Extraordinary services – per hour	2 650			Applied for ad hoc and/or		2 500
  				non-scheduled meetings.
  				Capped at daily rate of R21 200

  A deduction of R12 000 per meeting will apply for non-attendance at a scheduled meeting and R25 000 will be payable for attendance at a special board meeting.

  * Included in chairperson’s fee.
  # A lead independent non-executive director was appointed in F2011.

  Executive directors

  		Salaries (R’000)				Performance and equity incentives (R’000)				Total (R’000)
  	Name	30 June 2011		30 June 2010		30 June 2011		30 June 2010		30 June 2011		30 June 2010
  	MR Upton	3 109		2 974		7 323		8 527		10 432		11 501
  	CMF Teixeira	1 840		1 745		3 326		3 010		5 166		4 755
  		4 949		4 719		10 649		11 537		15 599		16 256

  In line with the requirements of the new Companies Act, the group discloses the remuneration paid to prescribed officers who are defined as the group’s executive committee. The three highest paid members of management are also reflected in the table below as per the recommended practice suggested in 2.26.2 of King III.

  Executive committee exco members

  		Salaries (R’000)				Performance and equity incentives (R’000)				Total (R’000)
  	Name	30 June 2011		30 June 2010		30 June 2011		30 June 2010		30 June 2011		30 June 2010
  	Prescribed officer 1	2 639		2 734		6 052		4 896		8 691		7 630
  	Prescribed officer 2	2 363		2 086		3 399		4 026		5 761		6 112
  	Prescribed officer 3	2 156		1 900		3 545		3 926		5 701		5 827
  	Prescribed officer 4	1 934		1 690		3 364		3 012		5 298		4 702
  	Prescribed officer 5	1 625		1 516		3 081		3 898		4 707		5 415
  	Prescribed officer 6	1 756		1 496		2 778		2 800		4 534		4 297
  	Prescribed officer 7	1 546		1 441		2 766		2 875		4 312		4 316
  		14 018		12 863		24 986		25 435		39 004		38 298

  Management committee members (excluding CEO, CFO and exco)

  Salaries (R’000)

  Performance and equity incentives (R’000)

  Total (R’000)

  Name

  30 June 2011

  30 June 2010

  30 June 2011

  30 June 2010

  30 June 2011

  30 June 2010

  Total earnings

  25 536

  22 304

  25 121

  26 582

  50 658

  48 886

  Details of executive directors’ share options and share appreciation rights

  	Name of director	Options granted – opening balance		Options granted during the current year		Strike price		Options exercised and paid		Options lapsed		Options granted – closing balance		Strike price		Options vested – closing balance
  	MR Upton
  	2010
  		400 000		–		30,44		–		–		400 000		30,44		300 000
  		71 000		–		54,81		–		–		71 000		54,81		23 430
  		100 000		–		50,20		–		–		100 000		50,20		33 333
  		100 000		–		43,07		–		–		100 000		43,07		–
  		166 000		–		28,63		–		–		166 000		28,63		–
  		–		150 484		34,09		–		–		150 484		34,09		–
  		837 000		150 484				–		–		987 484				356 763
  	2011
  		400 000		–		30,44		–		–		400 000		30,44		400 000
  		71 000		–		54,81		–		–		71 000		54,81		47 333
  		100 000		–		50,20		–		–		100 000		50,20		66 667
  		100 000		–		43,07		–		–		100 000		43,07		33 333
  		166 000		–		28,63		–		–		166 000		28,63		55 333
  		150 484		–		34,09		–		–		150 484		34,09		–
  		–		138 154		27,70		–		–		138 154		27,70		–
  		987 484		138 154				–		–		1 125 638				602 666
  	CMF Teixeira
  	2010
  		25 000		–		24,77		–		–		25 000		24,77		25 000
  		25 000		–		54,81		–		–		25 000		54,81		8 250
  		25 000		–		50,80		–		–		25 000		50,80		8 250
  		200 000		–		42,84		–		–		200 000		42,84		–
  		72 000		–		28,63		–		–		72 000		28,63		–
  		–		71 740		34,09		–		–		71 740		34,09		–
  		347 000		71 740				–		–		418 740				41 500
  	2011
  		25 000		–		24,77		–		–		25 000		24,77		25 000
  		25 000		–		54,81		–		–		25 000		54,81		16 667
  		25 000		–		50,20		–		–		25 000		50,20		16 667
  		200 000		–		42,84		–		–		200 000		42,84		66 667
  		72 000		–		28,63		–		–		72 000		28,63		24 000
  		71 740		–		34,09		–		–		71 740		34,09		–
  		–		66 175		27,70		–		–		66 175		27,70		–
  		418 740		66 175				–		–		484 915				149 001

  Details of prescribed officers, including three highest paid members of management, share options and share appreciation rights

  	Prescibed officer	Options granted – opening balance		Options granted during the current year		Strike price		Options exercised and paid		Options lapsed		Options granted – closing balance		Strike price		Options vested – closing balance
  	Prescribed officer 1
  	2010
  		18 750		–		12,55		–		–		18 750		12,55		18 750
  		200 000		–		30,44		–		–		200 000		30,44		100 000
  		42 000		–		54,81		–		–		42 000		54,81		13 860
  		53 000		–		50,20		–		–		53 000		50,20		17 490
  		100 000		–		28,63		–		–		100 000		28,63		–
  		–		90 818		34,09		–		–		90 818		34,09		–
  		413 750		90 818				–		–		504 568				150 100
  	2011
  		18 750		–		12,55		–		–		18 750		12,55		18 750
  		200 000		–		30,44		–		–		200 000		30,44		200 000
  		42 000		–		54,81		–		–		42 000		54,81		28 000
  		53 000		–		50,20		–		–		53 000		50,20		35 333
  		100 000		–		28,63		–		–		100 000		28,63		35 333
  		90 818		–		34,09		–		–		90 818		34,09		–
  		–		83 377		27,70		–		–		83 377		27,70		–
  		504 568		83 377				–		–		587 945				315 416
  	Prescribed officer 2
  	2010
  		18 750		–		12,55		18 750		–		–		12,55		–
  		400 000		–		30,44		–		–		400 000		30,44		300 000
  		42 000		–		54,81		–		–		42 000		54,81		13 860
  		53 000		–		50,20		–		–		53 000		50,20		17 490
  		99 000		–		28,63		–		–		99 000		28,63		–
  		–		89 762		34,09		–		–		89 762		34,09		–
  		612 750		89 762				18 750		–		683 762				331 350
  	2011
  		400 000		–		30,44		400 000		–		–		30,44		–
  		42 000		–		54,81		–		–		42 000		54,81		28 000
  		53 000		–		50,20		–		–		53 000		50,20		35 333
  		99 000		–		28,63		–		–		99 000		28,63		33 000
  		89 762		–		34,09		–		–		89 762		34,09		–
  		–		82 408		27,70		–		–		82 408		27,70		–
  		683 762		82 408				400 000		–		366 170				96 333
  	Prescribed officer 3
  	2010
  		300 000		–		30,44		175 000		–		125 000		30,44		50 000
  		34 000		–		54,81		–		–		34 000		54,81		11 220
  		15 000		–		50,20		–		–		150 000		50,20		49 500
  		91 000		–		28,63		–		–		91 000		28,63		–
  		–		81 842		34,09		–		–		81 842		34,09		–
  		575 000		81 842				175 000		–		481 842				110 720
  	2011
  		125 000		–		30,44		–		–		125 000		30,44		125 000
  		34 000		–		54,81		–		–		34 000		54,81		22 667
  		150 000		–		50,20		–		–		150 000		50,20		100 000
  		91 000		–		28,63		–		–		91 000		28,63		30 333
  		81 842		–		34,09		–		–		81 842		34,09		–
  		–		75 469		27,70		–		–		75 469		27,70		–
  		481 842		75 469				–		–		557 311				278 000
  	Prescribed officer 4
  	2010
  		12 500		–		12,55		–		–		12 500		12,55		12 500
  		25 000		–		24,77		–		–		25 000		24,77		25 000
  		100 000		–		54,81		–		–		100 000		54,81		33 000
  		39 000		–		50,20		–		–		39 000		50,20		12 870
  		75 000		–		28,63		–		–		75 000		28,63		–
  		–		72 514		34,09		–		–		72 514		34,09		–
  		251 500		72 514				–		–		324 014				83 370
  	2011
  		12 500		–		12,55		12 500		–		–		12,55		–
  		25 000		–		24,77		–		–		25 000		24,77		25 000
  		100 000		–		54,81		–		–		100 000		54,81		66 667
  		39 000		–		50,20		–		–		39 000		50,20		26 000
  		75 000		–		28,63		–		–		75 000		28,63		25 000
  		72 514		–		34,09		–		–		72 514		34,09		–
  		–		66 889		27,70		–		–		66 889		27,70		–
  		324 014		66 889				12 500		–		378 403				142 667
  	Prescribed officer 5
  	2010
  		150 000		–		51,00		–		–		150 000		51,00		49 500
  		50 000		–		50,20		–		–		50 000		50,20		16 500
  		68 000		–		28,63		–		–		68 000		28,63		–
  		–		67 938		34,09		–		–		67 938		34,09		–
  		268 000		67 938				–		–		335 938				66 000
  	2011
  		150 000		–		51,00		–		–		150 000		51,00		100 000
  		50 000		–		50,20		–		–		50 000		50,20		33 333
  		68 000		–		28,63		–		–		68 000		28,63		22 667
  		67 938		–		34,09		–		–		67 938		34,09		–
  		–		62 668		27,70		–		–		62 668		27,70		–
  		335 938		62 668				–		–		398 606				156 000
  	Prescribed officer 6
  	2010
  		37 500		–		18,56		37 500		–		–		18,56		–
  		19 000		–		54,81		–		–		19 000		54,81		6 270
  		100 000		–		50,20		–		–		100 000		50,20		33 000
  		70 000		–		28,63		–		–		70 000		28,63		–
  		–		63 362		34,09		–		–		63 362		34,09		–
  		226 500		63 362				37 500		–		252 362				39 270
  	2011
  		19 000		–		54,81		–		–		19 000		54,81		12 667
  		100 000		–		50,20		–		–		100 000		50,20		66 667
  		70 000		–		28,63		–		–		70 000		28,63		23 333
  		63 362		–		34,09		–		–		63 362		34,09		–
  		–		58 170		27,70		–		–		58 170		27,70		–
  		252 362		58 170				–		–		310 532				102 667
  	Prescribed officer 7
  	2010
  		45 000		–		12,55		–		–		45 000				45 000
  		300 000		–		30,44		–		–		300 000		30,44		225 000
  		30 000		–		54,81		–		–		30 000		54,81		9 900
  		37 000		–		50,20		–		–		37 000		50,20		12 210
  		69 000		–		28,63		–		–		69 000		28,63		–
  		–		61 672		34,09		–		–		61 672		34,09		–
  		481 000		61 672				–		–		542 672				292 110
  	2011
  		45 000		–		12,55		–		–		45 000		12,55		45 000
  		300 000		–		30,44		150 000		–		150 000		30,44		150 000
  		30 000		–		54,81		–		–		30 000		54,81		20 000
  		37 000		–		50,20		–		–		37 000		50,20		24 667
  		69 000		–		28,63		–		–		69 000		28,63		23 000
  		61 672		–		34,09		–		–		61 672		34,09		–
  		–		56 619		27,70		–		–		56 619		27,70		–
  		542 672		56 619				150 000		–		449 291				262 667

  Details of share options and share appreciation rights issued to manco (excluding CEO, CFO and exco)

  	Manco	Options granted – opening balance		Options granted during the current year		Strike price		Options exercised and paid		Options lapsed		Options granted – closing balance		Strike price		Options vested – closing balance
  	2010
  		12 500		–		12,55		12 500				–		12,55		–
  		50 000		–		12,28		10 000				40 000		12,28		40 000
  		18 750		–		18,56		18 750				–		18,56		–
  		18 750		–		20,00						–		20,00		–
  		25 000		–		20,25		18 750				25 000		20,25		25 000
  		262 500		–		24,77		–				162 500		24,77		162 500
  		25 000		–		26,39		100 000				25 000		26,39		25 000
  		75 000		–		31,87		–				75 000		31,87		37 500
  		267 000		–		54,81		–				267 000		54,81		91 410
  		377 000		–		50,20		–				377 000		50,20		124 410
  		32 300		12 089		16,03		–				44 389		16,03		–
  		100 000		–		33,63		–				100 000		33,63		–
  		692 000		42 505		28,63		–				734 505		28,63		–
  		–		625 380		34,09		–				625 380		34,09		–
  		1 955 800		679 974				160 000				2 475 774				505 820
  	2011
  		40 000		–		12,28		–		–		40 000		12,28		40 000
  		75 000		–		20,00		–		–		75 000		20,00		75 000
  		162 500		–		20,25		75 000		–		87 500		20,25		87 500
  		350 000		–		24,77		–		–		350 000		24,77		350 000
  		25 000		–		26,39		–		–		25 000		26,39		25 000
  		75 000		–		31,87		–		–		75 000		31,87		75 000
  		277 000		–		54,81		–		30 000		247 000		54,81		164 667
  		377 000		–		50,20		–		42 000		355 000		50,20		223 333
  		69 389		4 147		16,03		–		–		69 389		16,03		27 159
  		100 000		–		33,63		–		–		100 000		33,63		33 333
  		754 505		–		28,63		–		98 000		656 505		28,63		14 168
  		714 454		–		34,09		–		–		714 454		34,09		–
  		–		577 766		27,70		–		70 755		507 011		27,70		–
  		3 019 848		581 913				75 000		240 755		3 281 859				1 115 160