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SUN INTERNATIONAL ANNUAL REPORT ’10
REMUNERATION PHILOSOPHY
The Sun International remuneration strategy ensures the creation of an appropriate competitive base to attract and retain employees of the right calibre
and skills, rewarding employees fairly and equitably, and motivating them to achieve the highest levels of performance in alignment with Sun
International’s strategic objectives.
It is Sun International’s philosophy to adopt best practices and ensure that overall remuneration takes account of current trends whilst at all times
complying with prevailing legislation and successfully aligning itself to shareholder interests.
Sun International is committed to providing remuneration that attracts, retains and motivates staff and assists in developing a high performance culture
which supports the group’s key strategic objectives and provides a measure of flexibility within the package structure. A comprehensive Total Cost of
Employment (TCOE) (guaranteed package) remuneration strategy for all permanent full-time positions is adopted by all South African operations, and
where possible and practical from a taxation and regulatory standpoint, by the rest of the group’s operations.
All increments are based on guaranteed package taking into account projected inflation, internal equity, the external market, performance and
affordability. Remuneration levels are competitive compared to the market and the remuneration process provides for equitable pay that is fair, consistent
and transparent, but differentiates between average and excellent performers, thus remunerating people according to their contribution.
REMUNERATION STRUCTURE
The committee reviews market surveys and comparable organisations to ensure that the components of its remuneration structure are appropriate. The
company, in furtherance of the principles contained in King III, ensures that the fixed and variable remuneration supports key business strategies whilst
driving superior performance.
The mix of fixed to variable, and within the variable components, the mix of short-term and long-term incentives differ, depending on the level of the
employee. The more senior executives have a larger proportion of their total remuneration in variable pay. The components of the remuneration structure
are detailed below.
Guaranteed remuneration
Sun International’s policy is to compensate executive managers on a
guaranteed package basis at market median or better of the relevant
remuneration market. Remuneration scales are benchmarked regularly
against the specific markets and are generally structured so that midpoints
are between the median and the upper quartile levels. In order to retain
specialist skills and key talent, the group may in certain instances, elect to
pay above the median level.
Remuneration is quoted on an annual basis, paid monthly and split
between benefits and cash. The cash portion of the individual’s
guaranteed package will vary according to the value of benefits utilised
and deductions.
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Fixed Variable
Guaranteed package Short-term incentive (STI) – annual Long-term incentive (LTI) 3 to 5 years
Remuneration, retirement funding, healthcare
benefits, travel allowance (where applicable) and
guaranteed annual bonus (where applicable)
REMUNERATION REPORT CONTINUED
Executive bonus scheme Share awards:
Equity growth plan (EGP)
Conditional share plan (CSP)
Deferred bonus plan (DBP)
Restricted share plan (RSP)
Cash payment dependent upon economic
value added (EVA ® ) and EBITDA targets
Vesting subject to satisfaction of performance
conditions, including growth in HEPS, TSR
and continued employment
Through the committee, Sun International reviews its remuneration strategy
on a regular basis and annually benchmarks its levels of remuneration
against comparable companies of similar size and complexity, as well as
the relevant gaming and hospitality markets, to ensure that the overall
level of compensation of its senior executive management is competitive
and structured to achieve the optimum balance between guaranteed and
variable remuneration.
As in past years a leading remuneration consultancy has assisted
Sun International to compare the total remuneration (broken down
into its components of guaranteed package, STI and LTI) of its top
150 executive and management positions to that of a customised
sample of 59 organisations in South Africa of similar size and complexity.