Full annual report - African Bank - Investoreports

■ Ensuring that there is an adequate focus and attention
being given to addressing the overall wellbeing of our
employees.
The full charter of the group remuneration and transformation
committee is available on the group website under corporate
governance (www.abil.co.za).
Remuneration advisors
The group continues to utilise the services of independent
consulting companies who specialise in remuneration and
compensation as and when required, to assist with benchmarking
employees and executive directors’ remuneration and nonexecutive
directors’ fees.
Remuneration philosophy
The group is acutely aware of its dependency on appropriately
qualified, trained and experienced personnel to achieve its
goals. The rapid evolution of technology and increasing
competition gives customers more choice with regard to their
preferred service provider and the manner in which they
choose to acquire goods and services, the consequence of
which is that there is no room for mediocre service
organisations to survive in the long term. Furthermore, the
demand, both locally and internationally, for scarce skills is
ever increasing, which is exacerbated locally by increased
competition and regulation in the unsecured credit, retail and
insurance industries.
As a result, the group’s remuneration philosophy needs to
ensure that it:
■ Retains, develops and continues to attract people with the
required skills necessary to enable the business to meet its
current and future demands;
■ Develops a collaborative and single business focus
amongst the different business units and departments
that is directed towards attaining the group’s objectives
and strategy rather than just individual, departmental or
business unit success;
■ Clearly differentiates and rewards performance excellence
whilst discouraging and dealing with mediocrity;
■ Achieves the appropriate balance between short and long
term rewards;
■ Enables the payment of rewards and incentives out of a
portion of the shareholder value created during any given
period; and
■ Creates a sustainable leadership structure with the
succession pool necessary for continuity, growth and one
that progressively becomes more representative of the
demographic of South Africa.
>accountability
In order to ensure their independence and objectivity, all
employees in the risk and financial control departments are
remunerated in a manner that is independent of the
businesses they oversee. The remuneration of these
employees is dependent on the accomplishment of objectives
of their functions and is structured to attract and retain
qualified and experienced employees. This is to safeguard
the integrity of the risk and financial control oversight on the
reported results.
The group continues to strive for sustainable long term
growth and to this end a greater portion of senior
management and executive remuneration is put “at risk”
against the delivery of key long term objectives and is linked
to the performance of the group over a period of the next four
to five years rather than being dependent on a single year’s
results or performance. ABIL’s original entrepreneurial style
of business, which is still manifest in the organisation, results
in the promotion of individual accountability at all levels,
recognition and encouraging initiative and innovation, whilst
retaining a single business focus approach.
The group’s remuneration philosophy has been developed
around these core principles.
Remuneration policies and structures
Review of remuneration process and structure
The remuneration process and structure is reviewed annually,
in July for Ellerines employees, October for African Bank
employees and November for senior management and
executives. There were no significant changes to the
remuneration process during the reviews in the current
financial year.
Changes for the 2013 financial year
Employees, excluding the ABIL executives, whose
performance met job requirements, were granted increases
of between 5% and 8% per annum on the CTC. In addition,
the medical aid subsidy was increased to R650 per month for
all employees whose annual CTC is less than R375 000.
Material downward adjustments
There were no material downward remuneration adjustments
during the current and previous years that may have been
necessitated by individuals’ sustained weak performance. All
poor performance is dealt with in line with the group’s policy
to assist and support the individual to achieve the level of
performance required within a reasonable time, failing which
the employment is terminated after the employee is taken
through a fair and structured process.
African Bank Investments Limited | Integrated Report for the year ended 30 September 2012 95