Remuneration Policy and Implementation Report

REMUNERATION POLICY AND IMPLEMENTATION REPORT

PART I: REMUNERATION POLICY

The group’s remuneration philosophy is based on the following principles:

  • Aligning executive remuneration with company performance and shareholder interests;
  • Setting remuneration standards which attract, retain and motivate a competent executive team;
  • Linking individual pay with operational and company performance in relation to strategic objectives; and
  • Evaluating compensation of executives including approval of salary, equity and incentive-based awards.

In applying these principles to remuneration practices, management aims to be market competitive and ensures that good governance is observed in relation to all remuneration practices. In applying these principles, the Remuneration Committee aims to be transparent and achieve fair and responsible remuneration for management.

The Remuneration Committee determines the remuneration of executive directors and other senior executive managers. The basic “cost to company” package consists of a basic salary. These packages are linked to the expertise and knowledge required in the position. Basic “cost to company” is fixed for a period of 12 months and is subject to an annual review. Executive directors’ increases are proposed by the chairman of the board, but are subject to prior review by the Remuneration Committee and final approval of the board. There is no restraint of trade in place for either of the executive directors. Changes to the remuneration of independent non-executive directors are approved by shareholders.

Executive directors’ remuneration

Randgold’s executive remuneration structure has historically only comprised of guaranteed remuneration, without any variable recurring bonus arrangement, although there have been ad hoc bonuses paid in the past. During the 2023 financial year of the Company, the Remuneration Committee has considered various alternatives with regard to the implementation of a bonus arrangement for the executive directors of the Company so as to more closely align the interest of the executive directors with those of the Company and its shareholders. Accordingly, the Remuneration Committee and the Board have approved a cash bonus scheme for the executive directors (“Bonus Scheme”), the further terms and conditions of which are set out below under the heading “Variable Remuneration”. An illustration of the potential impact of the Bonus Scheme is disclosed on page 17 of this report.

Guaranteed remuneration

Executive directors receive guaranteed packages. These guaranteed packages are reviewed annually in March. Salaries are set in relation to the scope and nature of an individual’s role, experience and performance, to ensure market competitiveness and sustainable performance. The board approved a 5% salary increase for the executive directors for the 2023 financial year (2022: 5%).

Variable remuneration

The Remuneration Committee has determined the terms and conditions applicable to the Bonus Scheme regard being had to the nature of the Company’s business and the role played by the executive directors in achieving same.

The Bonus Scheme will involve the payment of a once-off cash bonus to the executive directors, the value of which will be determined with reference to the increase of the net asset value of the Company. The relevant metrics are as follows:

  • The cash bonus payable will be 10% of the amount that the net asset value of the Company at the time of determination (“NAV”) exceeds the Base Value (defined below);
  • The Base Value per share is set at R1.05 per share, considering the net number of shares in issue of 71 585 172 shares, being R75 164 430 (“Base Value”);
  • The NAV for purposes of this bonus will be limited to a maximum of R1.5 billion and calculated before any form of distributions to shareholders.
  • The executive directors must be in the employ of the Company at the financial year end when the NAV is calculated.

Once the once-off bonus is paid, the bonus incentive will fall away. The Remuneration Committee shall at all times have full discretion in respect of the bonuses to be paid to the executive directors in accordance with the Bonus Scheme.

Illustration

Assuming the company has a NAV as at the end of December 2025 of (say) R300 million, the Cash Bonus for the executive directors will be calculated as follows:

NAV R300 000 000 R4.91/share
Base value: (R75 164 430) R1.05/share
Value Added: R224 835 570
10% Cash Bonus: R22 483 557 R0.31/share

Executive service conditions

There are no fixed-term service conditions.

There are no obligations in executive employment contracts which give rise to payments on termination of employment or office.

Non-executive directors’ fees

Non-executive directors receive fees for serving on the board and board committees. No nonexecutive director has an employment contract with the company and no consulting fees were paid to directors during the year.

The proposed fees for the 2024 financial year, which are subject to approval by shareholders at the forthcoming annual general meeting in May 2024, are included in the notice of the annual general meeting on page 99 of this report.

Remuneration governance

The Remuneration Committee operates under formal board-approved terms of reference. Their duties include but are not limited to the following:

Duties:

  • To consider the remuneration policy and to set strategic objectives for remuneration
    management within the company’s operations;
  • To make all determinations and take any action that is reasonably appropriate or necessary in the course of establishing the compensation of the company’s executives;
  • To review and approve corporate goals and objectives relevant to the compensation of the chief executive officer, evaluate the performance of the chief executive officer in light of these goals and objectives, and set the compensation level of the chief executive officer based on this evaluation;
  • To review, and make recommendations to the board where necessary, all new employment, consulting, retirement and severance agreements and arrangements proposed for the company’s executives. The Remuneration Committee periodically evaluate existing agreements with the company’s executives for continuing appropriateness;
  • To determine specific remuneration packages for each executive director and executive officer of the company, including fringe benefits, and to review these annually; and
  • To consider other matters relating to the remuneration of or terms of employment applicable to the executive directors and executive officers that may be referred to the Remuneration Committee by the board.

PART II: IMPLEMENTATION OF REMUNERATION POLICY

Director’s remuneration

 

Basic salary/fees

Bonus

Total

Directors

2023
R’000

2022
R’000

2023
R’000

2022
R’000

2023
R’000

2022
R’000

Executive            
M Steyn

3 169

3 019

3 169

3 019

H Gischen

3 135

 3 100

3 135

3 100

Non-executive            
JM Kesler

401

382

401

382

PE Burton

638

608

638

608

RJ Ferhsen

401

382

401

382

TS Dube

401

382

401

382

8 145

7 873

8 145

7 873

(All amounts stated above are exclusive of VAT, where applicable.)

No payments were made during the reporting period on termination of employment or office.

Shareholder approval

The remuneration policy and implementation report set out above are proposed to shareholders in separate non-binding advisory votes in terms of the notice of the annual general meeting. In the event that either the remuneration policy or the implementation report, or both, are voted against by 25% or more of the votes exercised at the annual general meeting, the board of directors will engage with such shareholders in order to clarify the nature of and evaluate the validity of such objections and legitimate and reasonable concerns and will, where possible and prudent, given the objectives of the remuneration policy, take those objections and concerns into consideration when formulating any amendments to the company’s remuneration policy.

Voting at the 2023 annual general meeting

At the annual general meeting on 8 May 2023, the shareholders endorsed the remuneration policy and the implementation report of the company by way of separate non-binding advisory votes of 97.13% and 97.13% in favour respectively. As the non-binding advisory votes were passed by the requisite majorities, no further engagement with shareholders was required. The Remuneration Committee believes that they applied the remuneration policy effectively and complied with all requirements.