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238 NEDBANK GROUP Limited INTEGRATED REPORT 2010TerminologyInterpretationFor the purposes of this policy:• the masculine gender shall include the other gender, and vice versa,and the plural shall include the singular, and vice versa; and• the terms must, is/are to, is/are required to, needs/need to and has/have to are used interchangeably and shall have the same degree ofobligation.Remuneration principles• The governance and management of remuneration in the group bythe Group Remuneration Committee (RemCo), the Group ExecutiveCommittee (Group Exco) and management to ensure statutory andregulatory compliance as well as alignment with codes of goodremuneration practice.• In support of the EVP, the group has implemented an appropriatemix of total reward for its various employee groups that will attract,motivate and retain talented employees, and will stimulate employeesatisfaction and engagement.• The RemCo has access to independent remuneration consultantswho provide independent advice to ensure that remuneration inthe group is in line with current market practices and complies withlegislation.• The management of remuneration supports and reinforces thegroup’s desired culture and agreed values.• The group’s remuneration policy should be transparent and iscommunicated to all staff.• Confidentiality of an individuals’ personal remuneration informationwill be respected and at all times dealt with in terms of statutoryrequirements.• All remuneration practices will be aligned with by the principles ofequity and equality, and implemented on the basis of differentiationin respect of performance.• In the management of remuneration, internal and external equity arekey considerations.– Under the principle of internal equity, all staffmembers willbe rewarded fairly and consistently according to their roles,individual worth and experience, also taking cognisance of thegroup, business unit’s and individual performance.– To achieve external equity, the group will monitor the relevantjob markets continuously to ensure a competitive total rewardpositioning, within the parameters of affordability.• The group annually assesses its remuneration distribution to ensurefair application and employment practices.• All remuneration practices comply with applicable statutoryrequirements.• Premiums for race, gender, specialist skills and other market driversshould be accommodated within broad remuneration ranges.• Performance management is applied and serves as input into themanagement of individual remuneration.• The group will provide employees and their dependants withan appropriate level of employee benefits within legislativerequirements.Total remuneration: all permanent staff (including executivedirectors)Guaranteed package (GP)• All RSA staff are remunerated on a ‘total cost to company’ (TCC)approach. It is the intention of the group to implement this approach,where appropriate, in the non-RSA countries.• The group will determine annually the GP applicable to all positions.Earning ranges are benchmarked against market median information,allowing a reasonable range to accommodate different levels ofcompetence, performance and applicable market drivers.• The group’s remuneration position is to pay for performance, whileensuring appropriate distribution around the market median andreflecting the skills in demand.• Employees can structure their GP within the framework of applicablepolicies and statutory requirements.• Annual adjustments, as defined in the appropriate relationshipagreement, will be agreed with the relevant recognised unions on anannual basis.• The RemCo is responsible for approving the overall mandate forthe annual remuneration review. Adjustments for the members ofthe Group Executive Committee are recommended by the ChiefExecutive to the RemCo and approved by the Nedbank Group Board.• The Chief Executive’s adjustment is approved by the Nedbank GroupBoard and ratified by the ultimate holding company.• Remuneration adjustments outside of the annual remunerationreview exercise may be considered under exceptional circumstancesand will be subject to the agreed authorisation.Job evaluation and market benchmarking:• Jobs are sized or benchmarked, using the appropriate methodologies,and matched to the respective market job and earnings range.• Job evaluations and market benchmarks are managed by theappointed job family committees, which are mandated with aspecific charter.• Job profile changes are proposed by the line manager and thenapproved by the appropriate job family committee.• Employees have sight of their market match and earnings range.Employee benefits• All employees have access to the same employee benefits, subject tothe statutory requirements and local practices.
239Reports andcertificationsConsolidatedannual financialstatementsShareholdermeeting mattersDefinitions andabbreviationsInstrumentcodesContactdetailsremuneration report• Employees have access to the following benefits:– leave;– retirement funding;– healthcare;– disability cover; and– death cover.• Depending on the requirements of a role, the company may allow forcertain job-specific structures and/or allowances.• The service contracts of executive directors are aligned with those ofgeneral staff and do not include any golden-parachute arrangements.Short-term incentive schemes (STIs):• STIs will be designed to reward performance both in terms offinancial and non-financial performance, desired behaviours anddeliverables within an agreed risk framework.• The RemCo has full and final discretion on all the group STIarrangements, including the approval of the final group pool and alsoratifies specific allocations on an annual basis.• The group operates a Compulsory STI Deferral Scheme, theparticipation and forfeiture rules of which are determined by theRemCo on an annual basis.• The group operates a Voluntary STI Deferral Scheme, which allowseligible participants to receive additional matched shares uponselecting participation and meeting certain criteria.• A sign-on bonus scheme is used as a recruitment incentive to aid inthe acquisition of potential candidates.• The RemCo approves STI pools on an annual basis and ratifies allshort-term incentive allocations.• The RemCo approves all proposed STIs in excess of 200% of GP onan individual basis.Long-term incentive schemes (LTIs):• LTIs are designed to retain key employees and to align their longtermperformance with that of shareholders.• The RemCo considers and approves the LTI scheme arrangements.• The relevant legal and governance processes are followed in eachjurisdiction to approve each scheme.• The group operates both an option (no further allocation since31 December 2007) and a restricted-share scheme as share-based LTI.• The RemCo approves the corporate performance targets applicableto LTI awards.• All LTI awards are allocated in the form of performance shares andretention shares.• The RemCo approves all LTI allocations on an individual basis.• The group operates a Deferred Short-Term Incentive (DSTI) Scheme,which is a cash-based LTI scheme.• In countries where the group is not listed, a cash settled phantomarrangement, linked to corporate performance targets, is used as anLTI vehicle.Ownership schemes:• As part of the broader black economic empowerment (BEE) initiative,RSA or in-country BEE schemes may also apply.Total remuneration: non-executive directors• The fees of non-executive directors are reviewed annually, in termsof corporate governance regulations, and approved by shareholdersat the AGM.Roles and responsibilitiesThe Nedbank Group Board (the board)The board is ultimately responsible for the financial reporting andsoundness of the group, including the remuneration policy. The boarddelegates responsibility for this policy to the RemCo, who will annuallyreview the policy.Group Remuneration Committee (the RemCo)The RemCo is responsible for reviewing and approving the remunerationpolicy and the strategy related to all reward matters for the group,including executive and non-executive remuneration.Group Risk and Capital Management Committee (the GRCMC)The GRCMC will on an annual basis, receive feedback from the RemCoto ensure that the remuneration requirements and practices of thegroup comply with relevant codes of conduct and best practice, therebyensuring alignment with the risk appetite and business plan of the groupand not encouraging excessive risk taking.Group Executive Committee (the Group Exco)The Group Exco is responsible for amongst other things the proposal, andimplementation, of remuneration strategies and policies for the group.Group Rewards DepartmentGroup Rewards Department will provide supporting frameworks,guidelines and tools to facilitate the process of remunerationmanagement across the group, inclusive of providing line human resourcemanagers with ongoing support and assistance.ManagementManagement is required to:• conduct open and honest discussions with employees aroundemployees’ individual remuneration;• ensure fair and equitable remuneration practices;• consult with Human Resources or Group Rewards Department in theevent that guidance on remuneration practice is required; and• treat all remuneration data with a high level of confidentiality.Line Human Resources• Line human resources managers are responsible for the remunerationpractices at a business level, and support line managers appropriatelyto ensure that the group is a place where our people can thrive,and that remuneration principles are applied in a fair and equitablemanner within the group.• Line human resources managers will work with line managers tomanage remuneration expectations and plan for future strategicbusiness growth.• Line human resources managers will upskill themselves andline managers to manage remuneration competently by havingmeaningful conversations with employees.’
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