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232 NEDBANK GROUP Limited INTEGRATED REPORT 2010Executive directorsIncreases in guaranteed packageOn 1 March 2010 Mike Brown was appointed as Chief Executivefollowing the retirement of Tom Boardman as Chief Executive on28 February 2010. Mike Brown’s GP was adjusted to R5 750 000 perannum with effect from 1 April 2010. This increase took into accountan annual increase in line with CPI, a market adjustment based on hisperformance and his remuneration levels relative to his peer group andalso considered remuneration data obtained from a number of surveys.The GP was considered and recommended by the committee, approvedby the board and ratified by Old Mutual plc.The Chief Operating Officer Graham Dempster’s GP was adjusted toR3 675 000 per annum and that of Chief Financial Officer Raisibe MorathiGP to R2 850 000 per annum, both effective from 1 April 2010. The sameconsiderations as for the Chief Executive were applied and the new GPswere recommended by the committee and approved by the board.Retirement schemesAll executive directors are members of the Nedgroup DefinedcontributionPension or Provident Funds. There are no defined-benefitliabilities in respect of the executive directors. Contributions to theretirement funds form part of the GP.Service contractsTom Boardman’s service contract as Chief Executive expired on28 February 2010. Mike Brown’s appointment as Chief Executive becameeffective on 1 March 2010, with a notice period of 12 months andretirement age of 60 years. This notice period and retirement age applyto all other executive directors.Termination arrangementsIn the event of their services being terminated as a no-fault termination,executive directors will be entitled to a severance pay equal to twoweeks’ GP per completed year service.No executive director or staffmember has any additional severanceagreements in place. Entitlements for previous LTI grants on terminationare dealt with under the relevant scheme rules.Short-term incentive schemes targetsThe current target and maximum STI awards applicable to the ChiefExecutive and executive directors are:• Target STI as a percentage of GP = 150%• Maximum STI as a percentage of GP = 250%The drivers of the annual STI pools are based on performance against thefollowing set of measures:• Group headline earnings versus target (50% of the primary financialperformance).• Group EP versus target (50% of the primary financial performance).• In addition, individual performance metrics apply (an additionalmodifier adjustment up or down of 22,5% of GP).Individual performance is measured on a balanced scorecard againstfinancial, clients, internal processes, transformation and organisationallearning dimensions versus targets.The broad objectives for each of these dimensions for the Chief Executivewere as follows:• Financial – achieve the 2010 financial targets in a sustainable waythat allows for appropriate growth in 2011.• Clients and relationships – position Nedbank Group for sustainablequality growth, identify strategic growth opportunities, focus onincreasing levels of sustainable non-interest revenue (NIR), enhancestakeholder relationships, brand position and client service, leadin corporate social responsibility and sustainability, and positionNedbank Group as a green and caring bank.• Management and Internal process – identify and implement strategicinitiatives that enhance productivity, manage risk conservativelythrough the cycle and manage impairments/collections.• Transformation – position Nedbank Group as South Africa’s mosttransformed company.• Organisational learning and leadership – establish a cohesive andhigh-performing Group Exco.The following table presents the basis on which the STI awards have beendetermined based on the assessment of the group headline earningsand EP performance for the financial year, as well as performance ofeach executive director against his or her agreed individual balancedscorecards:Target%of GP% of GPachievedforfinancialtargets% of GPachievedfornonfinancialtargetsFinal STI% of GPFinal STI% ofTargetA B C D = B+C E = D/ AMWT Brown 150% 111,3% 10,4% 121,7% 81%GW Dempster 150% 111,3% 11,1% 122,4% 82%RK Morathi 150% 111,3% 11,5% 122,8% 82%There is a mandatory deferral of any STI awards in excess of R1 million andan additional voluntary deferral that may be elected up to a maximum50% of the total award.The committee was satisfied with the performance levels achieved by theexecutive directors during a challenging year.