Full integrated annual report - African Bank - Investoreports

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Remuneration report continued
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 meets its current and future demands;
Develops a collaborative and single focused spirit amongst different business units that is directed towards
attaining the group’s objectives and strategy rather than just individual or departmental 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 in future becomes more representative of the demographic of South Africa.
In order to ensure their independence, all employees in the risk and fi nancial 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 qualifi ed and experienced employees. This is to safeguard the integrity of the risk and fi nancial
control oversight on the reported results.
The group continues to strive for sustainable long term growth and to this end a greater portion of 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 fi ve 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
The remuneration process and structure is reviewed annually in July for Ellerines’ employees, October for
African Bank’s employees and November for the senior management and executives. There were no signifi cant
changes to the remuneration process during the reviews in the current fi nancial year.
Our people (excluding executives) whose performance met job requirements were granted increases of
between 5% and 7,5% per annum on total cost to company whilst a further discretionary increase of 1,25%
was granted to those whose performance exceeded expectation. The increase on cost to company for the
ABIL executives was 6% per annum. In addition, the medical aid subsidy was increased by R150,00 per month
for all staff whose annual cost to company is less the R375 000.00.
There were no material remuneration adjustments during the current and previous years that may have been
necessitated by weak performance metrics of individuals.
Remuneration components
The group determines remuneration along the following signifi cant components:
Basic remuneration and employee benefits
The basic remuneration comprises fi xed monthly salaries for all permanent employees and sales commissions
paid to Ellerines sales staff and incentives paid to African Bank sales and collection staff. Permanent
employees are compensated according to market-related benchmarks, which are assessed on an ongoing
basis with some employees on a cost to company (CTC) basis whilst others are on cash packages, with
certain statutory contributions to retirement funds and group life and healthcare schemes being made by the
company.
Integrated report 2011 | African Bank Investments Limited