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Telkom Integrated Report 2017
Exco
Guaranteed packages are in line
with similar roles in the comparable
market according to organisational
size, profitability and complexity.
They are influenced by the scope
of the role and knowledge, skills
and experience required of the
employee. Guaranteed packages
are reviewed against individual
performance, and set against
market median. For full details on
exco refer to page 123. The average
guaranteed package increase was
0 percent (FY2016: 6 percent).
Management employees
Guaranteed packages for management levels are reviewed annually as part
of the company’s overall remuneration review process and are assessed
against individual performance. The average guaranteed package increase
was 0 percent (FY2016: 6 percent).
Bargaining unit employees
Telkom follows a balanced approach in granting annual salary increases for
bargaining unit employees with due consideration of the Consumer Price
Index (CPI), market movements and affordability. The company entered into
a two-year collaboration partnership agreement with organised labour in
June 2016. The agreement will expire on 31 March 2018. As part of this
agreement, no fixed salary increases were implemented for FY2017 and a
6 percent salary increase for FY2018 based on market functional areas’
50th percentile will be implemented.
Telkom introduced a variable-based incentive scheme for bargaining unit
employees, known as Performance Pays
.
Performance Pays focuses on
customer satisfaction and productivity metrics, and replaces the current STI
scheme, which is primarily driven by group financial performance.
This empowers and enables bargaining unit employees to be more in control
of their own destiny and rewards, and gives more direct and clear linkage
between individuals’ efforts and their monthly pay.
The Performance Pays incentives vary between 0 percent and 9 percent
based on individual performance and are payable per quarter. In addition,
employees who perform at or above a three performance rating each year,
will each receive a ‘14th cheque’, payable in June 2017. This 14th cheque will
be calculated based on individual total package value subject to the company
meeting its financial performance targets.
Benchmarking
Executive compensation is benchmarked to data provided in national
executive compensation surveys, and information disclosed in the annual
reports of companies listed on the JSE.
Ensuring an appropriate peer group to retain the integrity and appropriateness
of the benchmark data is a key task of the remco. Executive pay is
benchmarked annually.
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