Background statement from the Remuneration Committee Chairman
Our remuneration approach supports the attraction and retention of highly skilled leaders and employees, while motivating them to achieve the Group’s vision and realise its purpose. Our remuneration decisions are grounded in fairness and transparency, supporting the Group’s efforts to deliver value to our stakeholders.
Fagmeedah Petersen-Cook
Chairman
Attendance and composition
| Members | Invitees | Relevant skills profile of members |
|---|---|---|
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Committee members are highly skilled in business and strategy, legal, risk and governance and finance. |
* Resigned from the Board in July 2024.
** Appointed to the Committee in July 2024.
Focus areas for 2025
General
- •Engaged extensively with material shareholders who were willing to engage, following the Remuneration Policy and implementation report failing to achieve a 75% advisory vote approval.
- •Reviewed and approved the Committee Charter and annual Committee work plan.
- •Reviewed and approved remuneration-related disclosures in the IAR and AFS and the remuneration report for presentation at the AGM for purposes of passing non-binding advisory votes.
- •Noted the movements in Famous Brands’ B-BBEE scorecard related to employment equity.
- •Reviewed reports based on benchmarking studies to review Exco members’ remuneration relative to the market here.
- •Noted amendments to the Companies Act related to remuneration disclosures.
Remuneration matters
- •Approved a 5% increase for administrative employees, effective 1 March 2024.
- •Approved a bonus pool of 80% for administrative employees in December 2024.
- •Approved increases and bonuses for Exco members in line with the STI Scheme.
- •Approved the Executive LTI allocations in line with the Long-Term Share Plan rules.
- •Considered and approved the decision to defer salary increase payments to admin staff and executives to 1 June 2024 pending final review of business performance in May 2024.
- •Approved the vesting of LTI shares on 1 June 2024 and the purchase of shares by the Famous Brands Share Incentive Scheme to settle the number of shares due to participants.
- •Appointed Deloitte to review our pay mix and provide recommendations to improve it.
- •Engaged with dissenting shareholders following the 2024 AGM.
- •Considered feedback from shareholders on the 2024 Remuneration Policy and Implementation Report.
- •Reviewed and approved the STI and LTI Scorecards and Targets for 2025.
Bargaining unit wage negotiations
Our two-year wage agreement expired in February 2025. In March and April 2025, management negotiated a new two-year wage agreement with the three unions. The details of the new wage agreement are as follows:
- •6% for year one and year two.
- •All allowances to increase by 6%.
- •1.25% increase in provident fund contribution by the employer.
- •1.25% increase in provident fund contribution by the bargaining unit employees.
- •Total provident fund contribution of the bargaining unit staff to increase to 15% (7.5% by the employees and 7.5% by the employer).
- •Guaranteed 13th cheque.
Non-executive directors’ fees
- •Recommended a 5% increase in non-executive director fees subject to shareholder approval at the AGM.
Executive performance and pay
- •Reviewed the performance of the CEO and Group Financial Director for 2024 and set their scorecards for 2025.
- •In consultation with Exco members, the 2025 Group Scorecard was approved. The Exco members’ scorecard applies similar principles to the CEO scorecard, with a focus on fiscal discipline and alignment with the three-year strategic objectives.
Succession and executive development
- •Reviewed the CEO, Group Financial Director and Group HR Executive succession plans.
- •Conducted a succession deep dive of all senior positions in the Group, across all areas.
- •Noted management’s proposed succession plan for executive and senior management roles.
- •Oversaw the Leadership Development Programme to develop internal candidates for the CEO role.
Our operating context
Our operating environment for 2025 was characterised by a constrained trading environment, where consumers faced financial strain and reduced spending on restaurants. Our Brands’ expansion plans were also hampered by high interest rates, as well as some current and potential franchise partners failing to qualify for bank funding. Within this context, our remuneration targets must be challenging yet achievable to motivate our people. This is especially relevant in Famous Brands as we have historically had a large weighting of remuneration to the variable pay components, rather than fixed pay.
We commissioned Deloitte’s remuneration specialists to review our overall pay mix for the Exco. Work to address salaries of key Leading Brands positions began in April/May 2025. Many of these positions are highly specialised and scarce, and we have suffered losses of experienced skills in key functions, as our pay mix has become a constraint, given the economic headwinds to Group performance. Many of these regrettable losses are attributed to perceived inadequate remuneration, particularly in relation to guaranteed packages. We aim to revise our approach to ensure that we have a fit-for-purpose remuneration approach across the business.
| External considerations | Internal considerations |
|---|---|
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Key decisions and changes to policy
| External considerations | Internal considerations |
|---|---|
| Exco and executive succession | The Committee will work strategically with management to close the gaps in key roles. |
| 2025 STI and LTI Scorecards | Adjusted the targets and weightings of the elements of each scorecard, so that the financial metrics weighed more. |
| Administration employees’ bonus pool | After considering the Group’s financial performance, we decided to allocate a bonus pool of 80% for administration employees, which is lower than the 100% bonus pool allocated for 2024. |
| CEO and Group Financial Director’s increases | Approved a 5% annual increase for the CEO and a 23% increase for the GFD (adjusted to the market median). |
| Executive salary increases | Average of a 5% annual increase. |
| Malus and Clawback Policy | No malus and clawback conditions were triggered. |
| 2019, 2020 and 2021 LTI vesting |
Shares purchased to settle shares due: 350 494.
|
Engaging shareholders on our remuneration
The Committee values continuous dialogue with shareholders to maintain a mutual understanding of the link between Remuneration Policy and the Group’s performance and value creation. We do have a track record of engaging with shareholders on remuneration. For example, extensive engagements were conducted in 2022 and 2023, resulting in substantial changes to the Remuneration Policy, the LTI rules, and the STI scheme.
In line with our commitment to engage proactively with shareholders, in May and June 2024, Famous Brands invited shareholders to meet with the Chairman of the Remuneration Committee and the Company Secretary to discuss matters
- •Some shareholders remain opposed to retention share awards as these are not linked to performance conditions.
- •Concerns that the LTI metrics have removed Gourmet Burger Kitchen from the asset base due to the impairment, which inflates returns to the benefit of management.
Following this engagement with shareholders, all resolutions tabled at the AGM passed with the requisite majority. However, two of our resolutions did not receive the requisite 75% support from shareholders. King IV and the JSE Listings Requirements stipulate that if non-binding advisory remuneration resolutions do not receive 75% support, the Board must engage with dissenting shareholders to understand their reasons for dissent. The Company must disclose the outcome of these engagements in its next remuneration report. Following the AGM, an invitation was issued to shareholders to contact the Company Secretary to schedule such meetings, and sessions were held with Camissa Asset Management, 36ONE Asset Management and the PIC during August and September 2024.
Shareholders view on our remuneration (%)
Remuneration Policy
(%)
Implementation report
(%)
Non-executive directors'
fees
(%)
Shareholder concerns regarding remuneration
Shareholders expressed concerns with several key performance areas within our FY2025 STI and LTI scorecards. We reviewed these scorecards based on our engagements and our updated February 2026 Group Scorecard and the February 2026 LTI Scorecard can be found here and here, respectively.
| Shareholder feedback | Committee feedback and actions taken |
|---|---|
Financial metrics
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Our FY2025 Group Scorecard has a 50% weighting for financial metrics (up from 40% in FY2024). Our selected financial metric is HEPS growth. We believe HEPS is an appropriate measure of our Group’s quality of earnings. We believe that HEPS growth is not an objective measure. |
Operational plan performance
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We believe that our operational plan targets are valid, as achieving these targets is largely independent of financial performance. For example, the delivery of our new cold storage facility at our Midrand Campus will result in cost savings for our Logistics division. However, these will only be realised in our 2026 financial year. |
Market share and consumers
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In 2025, 65% of the weighting for market share and consumers is related to our South African operations. |
Transformation and ESG
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We believe that a Level 2 B-BBEE rating is sufficiently challenging. Maintaining a Level 2 B-BBEE rating demands focused attention and continuous significant spend every year. As we have no control over the ownership pillar, we must achieve a strong performance against the other four pillars of the scorecard. As a listed entity, our ownership scores for Black shareholders fluctuate as a result of ongoing share trading, and even minor changes can result in a lower overall score. We see strong commercial value in a high B-BBEE rating and believe that this target aligns with our business. The benefits include:
We have selected two targets aligned with our five-year sustainability plan. These GHG emissions reduction and water consumption reduction targets were chosen because we are significant emitters and users respectively, and we recognise the need to reduce emissions and water consumption. Achievement of these targets, benefits the business by improving our resilience and reducing costs related to energy and water. Our injury on duty target is relevant given the health and safety risks within our Supply Chain operations. |
Retention share awards
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For February 2026, the Committee decided not to award retention shares in the future. |
" As a Committee, we are re-evaluating our remuneration targets weightings for both the STI and LTI to ensure that these are intelligent, aligned with our core operations, and achievable but suffi ciently challenging. The Committee will engage with shareholders to ensure that our remuneration decisions are responsive, well-considered and fi nd the right balance between diverse stakeholder interests. "
Should 25% or more of the shareholders vote against either the Remuneration Policy or the implementation report at the next AGM, the Committee will invite the dissenting shareholders in the SENS announcement, together with the results of the AGM, 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).
Other stakeholder considerations
In South Africa, the Companies Act mandates a remuneration policy for public companies to ensure transparency and accountability in executive compensation. This aligns executive interests with those of shareholders and promotes a more transparent and accountable corporate environment.
We believe that a successful and sustainable company will only create value for shareholders and executives if it serves the needs of its broader stakeholders. Our February 2025 Group Scorecard includes measures that demonstrate value to our stakeholders:
- •Our Google ratings are a measure of consumer satisfaction and trust.
- •Our Voice your View ratings are a measure of employee engagement.
- •Our B-BBEE status target measures our contribution to transformation and upliftment in the communities we serve.
- •Our ESG measures, related to reducing GHG emissions and improving water management, demonstrate our responsibility in preserving South Africa’s natural capital and protecting the environment.
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 2025, the Committee engaged Deloitte to review our pay mix and provide a proposal to recommend how our remuneration model could be enhanced to address the challenge of talent retention. The Committee is satisfied with Deloitte’s independence and objectivity as an independent consulting firm with extensive experience in remuneration.
Amendments to South Africa’s Companies Act
We have noted the amendments to South Africa’s Companies Act and will continue to monitor it for any further developments. While the provisions related to remuneration are not yet effective, we have decided to disclose the following in our implementation report:
- •Total remuneration of the employee with the lowest remuneration.
- •The average remuneration of all employees.
- •The median remuneration of all employees.
- •The remuneration gap, or pay ratio, showing the difference between the top 5% and the lowest 5% of employees.
Priorities for 2026
The Committee aims to ensure appropriate, fair and responsible remuneration across the Group. Our priorities for 2026 include:
- •Engaging with shareholders to understand and address their concerns regarding remuneration.
- •Ensuring management is appropriately incentivised in a constrained operating environment.
- •Overseeing our Leadership Development Programme to develop successors for the CEO role.
- •Internal succession planning and leadership development in a scarce skills environment.
- •Reviewing Deloitte’s recommendations regarding our pay mix.
- •Where required, conducting peer benchmarking of our remuneration levels and practices to ensure that our decisions regarding remuneration and related matters are wellinformed.