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Remuneration policies and practices are guided by the Remuneration Committee of the board. The remuneration policy aims to match the market for the majority of employees and lead in areas of performance excellence, and critical and scarce skills. Remuneration comprises a balanced mix of guaranteed and performance-enhancing incentives aimed at attracting, retaining, developing, motivating and rewarding the best talent, thus ensuring that Implats employs the necessary talent and skills to enable it to meet its business objectives. Incentives relate to the performance of the individual, the organisation and the share price.

During FY2008, the committee reviewed short- and long-term incentives to ensure the motivation and retention of employees. The effectiveness of group retention schemes as related to middle and senior management was reviewed. Several retention mechanisms were implemented to retain specifically critical and scarce supervisory and technically skilled employees. Quarterly benchmark audits ensure market competitiveness and internal equity.

Directors’ remuneration

Executive directors

Executive director remuneration comprises the following:

• Basic remuneration package, which reflects the cash portion of the executive’s remuneration, is aligned with the market to ensure external equity. Individual salaries are reviewed annually based on performance, experience, responsibility, contribution of the individual, as well as company performance and market competitiveness.
• Employee benefits, such as medical and vehicle schemes, retirement funding and group life contributions by the company are applicable to all employees. All executives are members of a retirement fund and medical scheme.
• Annual performance bonus is determined by the performance of the individual and the company against a set of predetermined targets. The weighting of the respective contribution of company and individual targets is 50% company and 50% individual for production employees with a lesser individual percentage allocated to service employees. The bonus is capped at certain percentages based on the level of the executive. Senior management participate in the bonus scheme, which is based on individual achievement of balanced scorecard criteria, as set by the executive team and reviewed by the Remuneration Committee. The bonus is not guaranteed and the apportionment is based on the performance of group companies against set criteria and includes value-added elements (volumes and costs), safety improvements and transformation.
• Share Appreciation Bonus Plan: The Share Appreciation Bonus Plan is a notional share scheme issuing shares to all Executives based on various salary multiples depending on the executive’s grade. The plan pays out in the form of a cash bonus, linked to the increase in the Implats share price on the JSE. All employees from Patterson D to F levels participate in this scheme.
• Share Option Scheme: The Share Option Scheme was discontinued in 2004 and replaced with the Share Appreciation Bonus Plan.
• Preferred Compensation Scheme: Through the Preferred Compensation Scheme, the company contributes 20% of the employee’s basic remuneration package to an endowment policy on behalf of the employee. The individual may request the benefit payment from the policy after the terms of the service agreement between the company and the individual have been met. This benefit accrues to the employee after 36 months and every 24 months thereafter, provided the employee is still in service. All employees from Patterson D to F levels participate in this scheme.

Executive directors’ remuneration – for the year ended 30 June 2008

In the event of corporate action giving rise to a loss of office, demotion or the blighting of the career (in the opinion of the Remuneration Committee), executive directors and certain senior executives are entitled to a severance package of 24 months’ salary.

Directors’ share options and share appreciation scheme

No share options were granted and the share appreciation scheme does not apply to non-executive directors. Details of share options and share appreciation bonus plan notional shares outstanding and exercised by the executive directors, secretary and senior management are as follows:

The gains received on shares sold through the share option scheme and the share appreciation bonus scheme are as follows:

Gains on share options and share appreciation rights exercised

Non-executive directors

In terms of the Articles of Association, the fees for services as a director are determined by the company in a general meeting. The fees to 30 June 2008 were approved at the annual general meeting on 25 October 2007. Fees for the services of a director of the board are R200 000 per annum and R1.2 million for the chairman of the board*. Fees for the services of directors on board committees are R75 000 per annum and R165 000 for the Chairman except for the Audit Committee where these fees are R100 000 and R220 000 respectively. Directors’ fees in aggregate for serving on board committees for the year under review were as follows:

Non-executive directors’ remuneration – for the year ended 30 June 2008 (R000s)

Directors’ fees are reviewed annually to ensure that they keep pace with inflation and increases granted elsewhere in the organisation. It is proposed that directors’ fees be increased as follows:

* Includes attendance at all committee meetings.

These fees have been waived by the executive directors.

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