Our performance in 2009 - Sappi

Balance between fixed and variable pay
The chart alongside shows the ratios of performance related compensation to base salary and
benefits of executive directors and the relative value of the different elements, including the target
bonus and expected value of the long-term share-based compensation awarded in the year
ended 30 September 2009.
Base pay
The committee reviews the salaries of executive directors and other key management personnel
in December each year.
Base salary is targeted at the median of the market for comparable roles in companies of
similar size.
Market data is used to benchmark salary levels and to inform decisions on base salary changes.
Salaries are reviewed annually and individual performance is a key consideration.
2009 2008
Executive directors salary salary
R J Boëttger US$551,185 US$669,955
M R Thompson US$261,921 US$299,113
Despite the above US Dollar salary numbers, in South African Rand terms, Mr Boëttger received
a 9.9% increase and Mr Thompson received a 10.5% increase in 2009 over 2008.
Both Mr Boëttger and Mr Thompson are based at the South African Head Office and their salary
increases were reflective of the South African market conditions.
During 2009, the executive directors and the members of the executive committee voluntarily
forfeited one month’s salary in support of employees who experienced hardships as a result of
our difficult financial year.
Retirement benefits
Across the group and based on the location, it is the company’s policy to provide retirement
benefits through either a defined contribution fund or a defined benefit fund.
In certain European countries, 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 the plans differ by geography and are either contributory or non-contributory
plans. Where defined benefit plans continue to exist in the company, they are mainly legacy plans
closed to new hires. Employees who participate in these defined benefit plans continue to accrue
past and future 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.
Short-term incentives
The executive directors and other key management personnel throughout the group participate
in an annual management incentive scheme.
Incentive target awards range from 30% to 85% of annual base salary.
2009 annual report 85
At the beginning of the financial year, annual incentive targets are set to take account of current
business plans and conditions and there is a threshold performance below which no award is paid.
The plan rewards the achievement of group financial, regional financial (where applicable),
strategic and individual performance objectives.
governance