| Accountability |
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The CEO is responsible and accountable to the
board for all group operations. The CEO has
appointed managing directors (MDs) of the
main operating divisions to assist in discharging
this responsibility. The duties and responsibilities
of the MDs are detailed in a formal role
description, together with limits of authority.
These duties and responsibilities are approved
and reviewed annually by the CEO.
The company’s policy of decentralisation and its
flat organisational structure mean that each
region is managed autonomously. Each region
has its own operational, marketing and social
responsibility budget. Each business division is
responsible for its own results and responds
individually to customer needs, pricing policies
and social responsibility programmes. |
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| Company secretary |
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All directors have access to the advice and
services of the company secretary, supported
by the legal department and the group
secretariat. The company secretary
responsible for the duties set out in section
268G of the Companies Act (the Act) and
for ensuring compliance with the listings
requirements of the JSE.
The certificate required to be signed in terms
of subsection (d) of the Act appears on
page 91 of this report. |
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| Remuneration |
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| THE HUMAN RESOURCES AND
REMUNERATION COMMITTEE |
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| The group human resources and
remuneration committee (the remuneration
committee) is responsible for setting the
remuneration strategy of the group,
approving mandates for incentive schemes
in the group and for determining the
remuneration of executive and senior
management positions, relative to local and
international industry benchmarks. It also
makes recommendations to the board on the
remuneration of non-executive directors. |
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| REMUNERATION PHILOSOPHY |
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The remuneration philosophy of Steinhoff is
to attract, retain and motivate employees
while considering applicable market levels of
remuneration. The company’s primary
executive remuneration objective is to
appropriately reward executive directors
to ensure that their interests, as far as
possible, are aligned with the interests of
shareholders.
Annual incentive bonus arrangements have
been structured so that stretch targets are
based on corporate, business unit and
individual performance.
In setting remuneration levels, the
remuneration committee commissions an independent evaluation of the roles of
executive teams, and also of the next levels of
management in the group. The remuneration
committee takes independent advice from
consultants on market-level remuneration,
based on comparisons with other companies
operating in fields within which the group
competes for executive talent.
The remuneration committee recognises the
importance of linking rewards to business
and personal performance and believes that
the arrangements implemented provide an
appropriate focus on performance and a
balance between short-term and long-term
incentives. The annual bonus plan and longterm
incentive arrangements provide a
significant portion of the total reward for
achieving business and personal performance
objectives.
The remuneration committee constantly
monitors market practice to remain
competitive and ensure that reward policies
embrace all aspects of remuneration, support
company strategy and reflect good corporate
governance practices. The committee has
implemented changes to Steinhoff’s incentive
strategy to help deliver enhanced shareholder
returns. Currently no substantial changes to
the company’s policies on directors’
remuneration are envisaged. However, the
remuneration committee may develop policy
and, should it determine that changes are appropriate, the company will report these
changes to shareholders through established
channels of consultation and reporting. |
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| REMUNERATION OF EMPLOYEES IN
GENERAL |
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| The following principles are used to
determine appropriate remuneration levels: |
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| • |
Employees linked to compulsory and
binding bargaining structures and forums
are paid accordingly. Team performancerelated
incentive systems are optional to
ensure achievement of targets. |
| • |
Supervisory and middle management
remuneration is linked to competency
levels and market relativities. |
| • |
Underperformance is not incentivised.
Should any employees underperform,
active steps are taken to improve individual
performance. |
| • |
A team performance-related incentive
system is compulsory for all business unit
management teams. |
| • |
Strong long-term incentives, linked to
performance criteria, are created to ensure
that employees who perform well are
retained. |
| • |
The collective incentives promote and
reward entrepreneurial skills according to
performance. |
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| DIRECTORS’ REMUNERATION |
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The board applies the principles of good
corporate governance relating to directors’
remuneration.
Governance of directors’ remuneration in
Steinhoff is undertaken by the remuneration
committee.
The remuneration committee has recently
resolved that the directors’ fees, including
fees payable to non-executives directors, are
to be approved in advance at the relevant
annual general meeting and not merely to
present these fees for ratification. In this
regard, see the notice to shareholders on
page 226 in respect of the forthcoming
annual general meeting. |
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| EXECUTIVE DIRECTORS’ REMUNERATION |
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| Remuneration for executive directors consists
of a basic salary, performance-related
incentive bonus, retirement contributions,
medical scheme membership and long-term
share incentive schemes. It also includes fees
earned for services on the board of Steinhoff.
All benefits are based on the remuneration
principles outlined here. In line with
the group’s remuneration philosophy,
remuneration is reviewed annually by the
remuneration committee after evaluating
each executive director’s performance,
including that of the CEO. In addition,
remuneration packages are benchmarked individually taking into account local, regional
and global responsibilities. Details of the
remuneration of executive directors and
information on share rights are set out on
pages 211 to 217 of the financial statements. |
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| BASIC SALARY AND BENEFITS |
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| Salaries for executives are reviewed annually
in September. Salaries are adjusted based on
market-related activities and the performance
of the group and the individual. |
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| ANNUAL BONUS |
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| The remuneration committee uses an annual
performance bonus as an incentive to
executives to achieve predetermined financial
targets, based on earnings growth and cash
flow. The committee sets these targets
annually, and monitors them regularly. |
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