Remuneration report summary

In line with Telkom's PIVOT Strategy, the Remuneration Committee (Remco) focused on achieving sustainable business performance and strong financial results to create value for both shareholders and employees.

Our remuneration approach

Our Group total remuneration offering aims to:

Drive a high-performance culture by monitoring the implementation of the retention strategy and scheme
Influence remuneration decisions, with ESG metrics/performance conditions included in the
short-term incentive (STI) and long-term incentive (LTI) scheme rules
Be responsive to legislative changes to ensure that the remuneration policy is fit for purpose to attract and retain talent
Balance the remuneration mix for Executive Directors and Group Prescribed Officers to continuously align their interests with those of shareholders

We applied best practice, fit-for-purpose governance principles in developing the remuneration strategy and framework. The framework enables us to attract and retain diverse talent to drive the Group strategy through the OneTelkom shared values. This cultivates a high-performance culture and enables effective succession planning and leadership development.

To ensure long-term sustainability for all our stakeholders, all remuneration elements are linked to the PIVOT Strategy.

Aligned to the Group's PIVOT Strategy

Guaranteed Pay (GP) enables the Group to attract, motivate and retain diverse talent with the right mix of skills through competitive pay that reflects the right size, scope and complexity of the roles required to deliver on the business strategy.

	STIs Encourage discretionary effort by rewarding the achievement of exceptional performance outcomes relative to annual performance targets set to drive strategy execution. Three scorecards are used for STI: Group, business unit and individual scorecards.						LTIs Enable the achievement of exceptional and sustainable long-term results by creating valuesharing opportunities for all employees. There are separate Group performance conditions for the LTI.
	Group scorecard		Business unit scorecard		Individual scorecard		Group performance conditions – LTI
Strategy priorities	KPIs	Weighting	KPIs	Weighting	KPIs	Weighting	Strategy priorities	KPIs	Weighting
Financial	Group profit after tax (PAT) before STI Group revenue Group FCF	65%	External revenue (Rm) EBITDA before STI (Rm) Free cash flow (Rm)	50% - 55%	Financial performance	100%	Profit	HEPS growth	30%
Strategic execution	Business transformation	10%	To execute in line with the FY2026 approved business plan and scorecard	15% - 20%	Execution Business unit and function specific		Share value	Total shareholder return	30%
Customers	Mobile subscriber growth Fibre subscriber growth FTTH connected premises Revenue growth in the eight priority high-touch client accounts	15%	Improve customer experience Increase pre-paid performance Achieve customer satisfaction through digital channels and iNPS Revenue growth in the eight priority high-touch client accounts	15%	Leadership People strategy Culture transformation B-BBEE		Share value	ROIC	25%
ESG	Annual CO₂ emissions reduction Culture transformation: Improve employee engagement Women in leadership (M5 and above)	10%	Improve employee engagement Compliance with assurance providers’ findings Annual CO₂ emissions reduction	15% - 20%	Systemic risk management Energy interventions		ESG	Business strategy	15%
Executive Directors' and Prescribed Officers' individual scorecards are 20%, adding up to the Group and business unit weighted score of 100%.

FY2025 summary of remuneration policy changes

The remuneration policy is a critical part of our employee value proposition, enabling the Group to mitigate people risks while embedding a high-performance culture.

The shareholder engagements, along with our annual assessment, resulted in the following changes to the policy:

Benchmarked Executive Directors' remuneration and Group Prescribed Officers’ pay mix on-target performance relative to the market
Increased alignment with Group strategy through the Group, business unit and individual scorecards
Reviewed and tested the STI and LTI schemes to ensure they drive sustainable growth and strategic performance achievement over the short and long term
Continued to ensure that ESG metrics are integrated into the performance conditions of the STI and LTI schemes
Conducted a fair pay analysis and introduced the fair pay policy as a guide to remuneration decisions that are ethical, fair and responsible

Fair pay policy

Remco approved the fair pay policy, which captures Telkom’s fair pay philosophy. The policy will serve as the basis of the remuneration policy, ensuring it:

Establishes a structure for fair and responsible pay practices that align with our Group values
Supports our business objectives
Meets the expectations of stakeholders in a sustainable manner

Telkom
Rm

Total guatanteed package

Total remuneration

Gini coefficient

Palma ratio

Overview of Group financial performance outcomes

The Group's short-term incentive scorecards cover various aspects of financial and non-financial performance. These performance conditions are aligned with market practice and weighted accordingly
Financial performance considerations include achieving significant revenue growth beyond budget, optimising PAT and increasing FCF. Telkom is also committed to strategic project execution, customer satisfaction, and its ESG strategy
Overall Group, business unit and individual performance directly impact the bonus pool that is approved for distribution
Based on our FY2025 audited financial results, we exceeded PAT on-target performance by 27% against the approved STI scheme plan. The Board approved a profit sharing of 14.3%, resulting in a bonus pool of R711 million that will be distributed to all eligible employees.

The Group's actual achievements against the targets are reflected below:

Performance measures	Group scorecard weighting	Threshold (25%)	On target (100%)	Stretch (150%)	Actual achievement	Actual achievement %
Group financial	50%
PAT before STI	20%	2 579	3 185	4 302	3 630	119.9%
Group revenue	10%	46 585	47 612	49 080	44 572	—%
FCF	20%	1 918	2 525	3 642	2 778	11.3%
Strategic project execution	20%	Key initiatives approved by the Board	100% Key initiatives executed	100% Key initiatives exceeded and incremental revenue upliftment	3 (100% Key initiatives executed)	75%
Customer	15%	Customer metrics scorecards driven by Consumer, Openserve and BCX	Customer metrics scorecards driven by Consumer, Openserve and BCX	Customer metrics scorecards driven by Consumer, Openserve and BCX	2 (Customer metrics scorecards driven by Consumer, Openserve and BCX)	127.8%
ESG	15%
Environment: Annual CO₂ emissions reduction	5%	3.5%	4.2%	5.0%	5.5%	115.0%
Social: Improve in terms of: 1. Business unit as a good place to work 2. Products and services 3. Current work environment	5%	6 point overall average score improvement	7-12 point overall average score improvement	13 points and above overall average score improvement	Good place to work for - achieved 17 basis points, Products and services achieved - 61 basis points, Work environment achieved - 10 basis points	150.0%
Increased women in leadership (M5 and above)	5%	35.0%	36.0%	37.0%	35.5%	59.5%
Governance, Compliance and Assurance	5%	85%	90%	100%	100.0%	150.0%
Total	100%					100.9%

Single-figure remuneration

Executive Directors

The following table outlines the aggregate remuneration, benefits paid and STIs for FY2025:

GCEO: S Taukobong

	FY2025	FY2024
GP	R9 922 500	R9 450 000
Motor car insurance	R11 997	R11 997
Funeral benefit	R296	R296
STI	R10 000 000	R2 972 575
LTI (vested shares)	R13 357 447	R0
Total remuneration paid	R33 292 240	R12 434 868
Telkom Retirement Fund (TRF)*	R902 948	R859 950

GCFO: NS Dlamini

Appointed 1 December 2023

	FY2025	FY2024
GP	R6 825 000	R2 166 666
Motor car insurance	R0	R0
Funeral benefit	R296	R99
STI	R6 142 461	R545 234
LTI (vested shares)	R0	R0
Total remuneration paid	R12 967 757	R2 711 999
TRF*	R514 605	R163 367

*	Company contributions included in GP. However, employees have the flexibility to determine contributions.

Group Prescribed Officers

The following table outlines the aggregate remuneration, benefits paid and STIs for FY2025:

	Group Prescribed Officers
	DJ Reyneke	NM Lekota	AC Beukes	LM Siyo	PJ Bogoshi	SE Mmakau	M McNamee*	FY2025 Total	FY2024 Total
GP	R6 420 960	R4 656 161	R5 985 000	R6 001 338	R5 956 856	R4 250 000	R2 855 244	R36 125 559	R27 601 534
Motor car insurance	R11 997	R0	R11 997	R11 997	R0	R0	R2 999	R38 990	R37 990
Funeral benefit	R296	R296	R296	R296	R296	R296	R0	R1 776	R1 554
STI	R4 367 627	R4 190 767	R0	R5 679 695	R2 251 937	R3 940 910	R2 740 642	R23 171 578	R7 090 358
LTI (vested shares)	R6 533 339	R7 012 235	R9 229 178	R7 964 960	R10 685 255	R0	R0	R41 424 967	R10 732 525
Separation	R0	R0	R6 901 595	R0	R0	R0	R0	R6 901 595	R2 214 864
Leave payment	R0	R0	R552 462	R0	R0	R0	R0	R552 462	R112 350
Sign-on	R0	R0	R0	R0	R0	R908 333	R0	R908 333
Total remuneration paid	R17 334 219	R15 859 459	R22 680 527	R19 658 286	R18 894 344	R9 099 539	R5 598 885	R109 125 260	R47 791 174
TRF**	R726 211	R488 897	R544 635	R348 078	R580 794	R331 500	R225 165	R3 245 279	R2 443 437

*	M McNamee joined on 15 July 2024.
**	Company contributions included in GP. However, employees have the flexibility to determine contributions.

Executives’ and Group Prescribed Officers’ emoluments are set out in the annual financial statements, which are available online.

Refer to the Remuneration Committee report for its focus areas.

The separate remuneration report online includes:

The report from the Remco Chairperson
Our detailed remuneration policies
The implementation report for FY2025