It is the view of the Remuneration Committee that the Remuneration Policy has achieved its stated objective of driving performance while ensuring retention.
We value the opportunity to listen to shareholders to better align their preferences and perspectives with those of our executives for the long-term benefit of the Group. Our stakeholders’ views were a major consideration in our decision making for 2024, including a complete rethink of our LTI scheme.
External considerations
- Shareholder views and recommendations.
- Economic trends and competitive pressure.
- The labour market and pay gap between executive management and other employees.
- South Africa’s skills shortages which are exacerbated by emigration.
- CPI and the rising cost of living.
- Requests from bargaining unit representatives.
- Market benchmarks for employees are premised on comparable job grades and selecting the appropriate peer group benchmarks with similar attributes, including complexity, industry, size, and geographic spread.
- The potential maximum total remuneration that each executive could earn, benchmarked against the market at the 50th percentile.
Internal considerations
- Cash flow management and cost leadership remain important in ensuring our continued financial recovery.
- Alignment between roles, including between the CEO and Group Financial Director roles and between executive roles across SA, AME, and the UK.
- Implementing the legal requirements regarding equal pay for equal value of work.
- Executive recruitment and succession planning considerations.
Shareholders’ view on our remuneration
Two of our remuneration-related resolutions did not receive strong shareholder support at our 2022 AGM. In our 2024 financial year, the Committee engaged extensively with various shareholders regarding the underlying reasons for dissenting votes. These concerns were successfully addressed, and the votes at our 2023 AGM showed a marked improvement.
We continue to address shareholder feedback on our remuneration decisions.
Shareholder feedback |
Committee feedback and actions taken |
TSR peer group
| Shareholders requested disclosure of the comparator peer group for the TSR measure. | We believe that our peer group for this measure is appropriate and has been selected with the guidance of remuneration consultants. We shared this with shareholders via email, and it is available here. |
Free cash flow as a Long-Term Share Plan measure
| Some shareholders requested that free cash flow be considered for inclusion as a Long-Term Share Plan metric. | The Committee considered free cash flow as a metric and concluded that it was not an appropriate metric given that the Group has a good cash generation track record. |
TSR calculation
- 60th percentile of the peer group; and
- Cost of equity + 2%.
TSR weighting
| Some shareholders expressed a preference to see TSR carry more weight. | The Committee considered the weighting of TSR relative to other KPIs in the LTI scorecard (refer page 174) and remain of the view that it is appropriately weighted. |
ROCE
| Concern was expressed about how ROCE is calculated in light of the GBK impairment. If no adjustment is made for the impairment (adding the impairment back to the capital base), then ROCE will be artificially overstated. | ROCE is calculated on continuing operations, which excludes the impact of GBK. |
Transformation targets
| Some shareholders would like to see transformation targets be more stretched as the Group is already at a B-BBEE Level 2. | We remain comfortable that our targets for transformation are sufficiently stretched as these targets increase annually and require management focus and effort. |
There were various improvements made to the Remuneration Policy and Implementation Report in 2024, as well as the Group STI and LTI Scorecards for 2024. However, should 25% or more of the shareholders vote against either the Remuneration Policy or the Implementation report at the next AGM, the Committee will notify the dissenting shareholders through a SENS announcement, which will either:
- Invite shareholders to engage with Famous Brands and provide the manner, date, and timing of the engagement.
- Notify shareholders of the intent to engage with them shortly (the details of which will be extended to shareholders as soon as is reasonably possible).
Remuneration consultants
Where appropriate, the Committee obtains advice from independent remuneration consultants. The Committee employs the consultants directly, with direct engagement from the Committee to ensure independence. In 2024, the Committee engaged Deloitte to contribute to and review the implementation policy for the Long-Term Share Incentive Plan. The Committee is satisfied with Deloitte’s independence and objectivity as an independent consulting firm with extensive experience in remuneration.