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04
Transparency and accountability
The STI component is an
incentive that rewards the
achievement of annual
performance targets for
management employees.
STIs
Introduction
The level of achievement determines the level of payment against each
weighted company performance measure. The STI plan is designed and
aligned with shareholder expectations.
It emphasises a remuneration policy that is performance driven, supports
alignment between senior management and shareholders, and links STI to
company performance.
The FY2017 plan was approved by remco and the board, with the following
clearly defined principles:
> Both EBITDA and Profit after tax (PAT) targets must be achieved at the
group company level to trigger any STI payment.
> No STI will be payable if the achievement is less than the hurdle rate.
Remuneration
report
Remuneration
structure
– continued
STIs
STIs comprise cash payment that is
payable after finalisation of audited
results
>
Hurdle rate to qualify for any STI
payment is 95%
>
Budget target – 100%
>
Stretch target – 110%
>
Maximum cap – 120%
>
Base payment set at 7.4% of PAT
Bargaining unit employees, employees
who perform at or above a three
performance rating received a
14th cheque.
Telkom introduced a 25 percent interim STI payment for all management
employees based on the achievement of interim EBITDA and PAT targets.
The size of the STI pool will depend on the achievement of PAT measures
and will be variable. In line with the remuneration policy, the overall company
performance will be measured at company, business unit and divisional level
as indicated below.
Business unit
Corporate
centre
Total
Group financials
20%
20%
20%
Business unit/
corporate centre
60%
60%
80%
Divisional
20%
20%
Total
100%
100%
100%
The rules, targets and measurements are tabled annually on the
recommendation of remco to the board for approval, subject to the actual
audited company performance reflected in the plan under review.