2008 Annual report - Sappi

sappi
In certain European jurisdictions, retirement benefits are
provided by the state through the social security system. The
design of both the defined benefit and contribution schemes in
Europe takes into account these social security benefits when
determining the contribution tables and final pensions earned.
Contributions to plans are either contributory or non-con -
tributory. A number of defined benefit plans in the group have
been closed to new entrants. Employees who participate in
these legacy defined benefit plans continue to accrue benefits
in such plans.
Other benefits
These include benefits such as medical insurance, death and
disability insurance, vehicle benefits, leave and recognition for
service, and are applied where applicable in respective regions
and employee categories.
participate in the share scheme received share options under
the Share Incentive Scheme.
Long-term incentives are intended to be a key retention tool.
Details of The Sappi Limited Share Incentive Trust and The
Sappi Limited Performance Share Incentive Plan can be
found in note 29 on page 144.
• Service contracts and notice provisions
The group chief executive officer and his direct reports all
have employment contracts which outline the required notice
periods in the event of a termination of employment.
The notice terms vary from six months to 18 months, and
include base salary plus benefits, for that period.
Variable pay
• Short-term incentives
Executive directors and other key management personnel
throughout the group participate in an annual management
incentive scheme.
Incentive target awards range from 15% to 85% of base
salary.
The key business performance criteria for the 2008
financial year were operating income, working capital and
capital expenditure.
All other employees participate in either sales incentive
plans, performance bonus schemes or receive discretionary
bonuses or a thirteenth cheque payment.
Payments in terms of short-term incentives are dependent
upon achievement of the business performance targets or
production/sales targets being met or exceeded in addition
to an employee’s individual performance.
• Long-term incentive programmes
The group operates two long-term incentive programmes:
the Sappi Share Incentive Scheme and the Performance
Share Incentive Plan.
For 2008, executive directors and other key management
personnel received share allocations under the Performance
Share Incentive Plan. All other employees who are eligible to
// 2008 Annual report
71