SECTION 1: BACKGROUND STATEMENT

Statement from the chairman of the remuneration committee

Dear stakeholder

On behalf of the remuneration committee (the committee), I am pleased to present the 2022 remuneration report which, in compliance with best practice reporting as recommended by the King IV™* Report on Corporate Governance for South Africa (King IV™), highlights:

• Key components of our remuneration policy
• Alignment of our remuneration policy with Tiger Brands’ business strategy and priorities
• Implementation of the policy for the year ended 30 September 2022 (FY22).

This year, the Tiger Brands executive leadership team has effectively led the execution of our six strategic priorities to improve business performance, and drive growth and innovation while proactively navigating prevailing market conditions.

* Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all of its rights are reserved.

Our remuneration outcomes

In line with our people strategy, enhancements were made to the remuneration strategy, including ensuring further alignment of critical business key performance indicators (KPIs) to measure and reward performance against our strategy. The remuneration committee approved the implementation of a revised short-term incentive (STI) scorecard that drives the achievement of KPIs, while maintaining a healthy balance between financial, strategic and sustainability outcomes.

As a result of historically high turnover of executive committee members, many years of no STI payments, and limited long-term incentive plan (LTIP) vesting, the retention risk of executive committee members had increased, presenting a knock-on effect to the stability of the CEO’s strategic and operational support team. To this end, there was a business need to provide executive committee members with a value proposition to continue driving the turnaround strategy, especially since there are signs of traction and improved momentum. Motivated by the CEO, the remuneration committee has thus approved retention awards for executive committee members, (excluding the CEO). This was a once-off award intended to retain executives, rather than reward performance, and is deemed to be in the long-term interest of the company. The awards are in line with the company’s retention policy; the various forms are explained in detail in the implementation report.

Looking ahead, the remuneration committee approved the inclusion of certain ESG metrics in the FY23 STI scorecard in line with Tiger Brands’ sustainable future strategy and associated targets (see further details here).

Shareholder voting outcomes

The remuneration committee maintains strong relationships with stakeholders and strives towards high standards of disclosure to ensure that there is a clear understanding of our remuneration policy and practices.

The non-binding advisory votes by shareholders over the last three years are summarised below

% vote in favour	February 2022	February 2021	February 2020
Remuneration policy	91,55%	89,20%	76,55%
Remuneration implementation	96,94%	82,24%	78,71%

Shareholder engagement

The remuneration committee is committed to shareholder engagement and will take the following steps if 25% or more of total votes exercised by shareholders at the upcoming AGM are against the remuneration policy or implementation report:

• Tiger Brands will issue a SENS announcement requesting shareholders to appropriately engage on their specific concerns and will seek to actively engage with dissenting shareholders by inviting them to one-on-one meetings, where necessary
• Tiger Brands will consider shareholder concerns and report on the outcome of the engagements and measures taken, in its next integrated report.

While the voting outcomes on the remuneration policy and the implementation report have been positive over the last three years, the remuneration committee chairman, the chief human resources officer (CHRO) and investor relations proactively conducted a series of engagements with key shareholders on the following matters:

1.	Retention awards to executive committee members, excluding the CEO granted in FY22
2.	Best practice in terms of incorporating ESG metrics into executive reward
3.	Best practice with regards to minimum shareholding requirements
4.	Best practice in terms of LTIP performance conditions, targets and structure
5.	General disclosure.

Key focus areas, objectives, and activities for FY22

In FY22 the committee undertook the following activities:

• Reviewed the peer comparator group for the purposes of non-executive director and executive remuneration benchmarking
• Benchmarked the appropriateness of the LTIP performance conditions, targets and structure
• Approved the wage negotiation mandate for bargaining unit employees
• Approved the salary increase mandate for employees on total remuneration packages (TRP)
• Approved the remuneration for executive directors and executive committee members
• Approved the STI and LTIP performance conditions, targets, and weightings in respect of FY23
• Embedded the STI integrated scorecard and LTIP scheme to align behaviours with business objectives, shareholder interests and drive winning performance
• Recommended for approval to the board non-executive directors’ (NEDs) fee increases
• Approved the implementation of measures to address identified historical pay disparities.

Focus areas for FY23

• Embedding the STI integrated scorecard and LTIP scheme to align behaviours with business objectives, shareholder interests and drive winning performance
• Benchmarking the total reward of the CEO and CFO against a comparator group of JSE-listed companies
• Benchmarking total reward of the executive directors and senior management against market data obtained from the REMchannel remuneration survey
• Benchmarking NED fees against a comparator group of JSE listed companies
• Incentivising performance more tangibly through the STI and sales incentive schemes. The sales incentive scheme was implemented in FY22 and targeted at sales representatives and regional customer operations managers. The objective is to drive an increase in sales
• Continuously address identified pay inequities during the annual salary review process by allocating a separate income disparity budget to address the inequities
• Continuing to review our reward mechanisms and practices with a view to introducing innovative reward strategies to:
  » Drive winning performance
  » Attract, retain, and motivate key and critical talent, core, and leadership capabilities
  » Embed the recognition platform and practices that improve the way we recognise execution excellence, agility and consumer-obsession.

External advice provided to the committee in FY22

In reviewing our remuneration offering to ensure that it is competitive, fair, transparent, and responsible, we enlisted the services of PwC South Africa to assist us with benchmarks relating to remuneration of executive directors and non-executive directors, incentive scheme market practice, remuneration trends and survey data. KPMG are engaged annually for the purpose of auditing STI payments, while EY provide services to assist with the review of the single total figure of remuneration table here. The committee is satisfied that PwC South Africa, KPMG and EY are independent and remained objective in providing these services.

Voting at the Annual General Meeting (AGM)

As required by King IV^TM, the remuneration policy and implementation report that follow, will be tabled for separate non-binding advisory votes by shareholders at the upcoming AGM in February 2023. As required by the Companies Act, non-executive directors’ fees for the coming year will be put to shareholders by way of a special resolution.

Achievement of policy objectives

On behalf of the committee, I am satisfied that the remuneration policy is appropriate, and I am confident that our remuneration policy has achieved the desired outcomes for FY22 and is aligned with the company’s strategic goals. The remuneration disclosures presented in this report have been made in compliance with the remuneration policy as approved by shareholders. No known deviations from the remuneration policy have been made in the current financial year, other than the retention awards made to the executive committee, excluding the CEO.

Donald Wilson
Chairman – Remuneration committee

1 December 2022

SECTION 2: OVERVIEW OF REMUNERATION POLICY

 

Remuneration governance

The membership of the Tiger Brands remuneration committee consists of a minimum of three non-executive directors, the majority of whom are independent. The CEO is a permanent invitee to all meetings and other executives may attend the meetings by invitation.

The CEO and nominated invitees are not present when matters relating to their own remuneration are discussed. The group company secretary is the secretary of the committee.

The committee meets four times a year and, where necessary, additional meetings may be held.

As documented in the remuneration committee terms of reference the duties and responsibilities of the committee are:

• Remuneration governance
• Executive and senior management remuneration and performance
• Non-executive director remuneration.

The terms of reference are reviewed annually.

Fair and responsible remuneration

Tiger Brands is committed to a total reward offering built on a strong foundation of fair and responsible pay that is linked to our remuneration philosophy of pay-for-performance. Salaries are benchmarked annually against the REMchannel salary survey to ensure that people are remunerated fairly and in line with market practices. We follow a job grading methodology that is consistent and provides a fair and accurate job grade, which allows for proper salary benchmarking.

We also use a pay progression model to fairly reward employees based on performance and market positioning that enables the management of employees who are significantly below and above market rates.

Pay inequities are assessed and adjusted during the annual reward review process. Employees whose annual TRP are below the minimum pay scale are assessed and salaries adjusted in line with the income disparity mandate. This salary adjustment is generally capped at a predetermined percentage to limit exorbitant increases. Specific focus is given to ACI, female and employees in roles that require scarce and critical skills.

Tiger Brands’ remuneration strategy

The remuneration strategy is aligned with the Tiger Brands’ people strategy, which is geared to enable the execution of the business strategy and accelerate business performance.

Our remuneration principles have been designed to support the execution of the people strategy and are premised on our belief that great people and great brands are at the core of our success. Our reward framework is holistic, encompassing the financial elements of reward, as well as non-financial aspects such as recognition, development, the work environment, culture and challenging work.

Our remuneration policy has the following key objectives:

• Strengthen our ability to competitively attract and retain talent to enable the execution of our strategy
• Align Tiger Brands’ annual and long-term performance to the delivery of the strategy
• Align Tiger Brands’ reward structures with shareholder interests
• Implementation of minimum shareholding requirements
• Motivate and stimulate high performance across Tiger Brands through competitive short and long-term incentives
• Ensure fair and responsible pay
• Ensure that reward mechanisms are simple and provide line of sight to all employees.

We have summarised below the various remuneration elements (guaranteed package, short-term incentive and long-term incentive) that Tiger Brands offers at different levels of employment (excluding bargaining unit employees):

TRP employees		All inclusive salary package plus annual STI based on performance. LTIP applicable to grades D and above.
Anchor point		Tiger Brands has anchored its current fixed pay position at the 65th percentile of the national market. We aspire to achieve a normal distribution around the anchor point based on individual performance, talent/potential, experience and in certain instances, tenure. It is important to note that guaranteed packages are not automatically adjusted to the anchor point. The performance-based increases granted in the organisation (including those for executive directors and executive committee members) are managed within the overall salary increase budget and the pay progression model as discussed below.
Benefits		Benefits include retirement fund contributions, funeral cover, permanent health insurance, death-in-service cover, medical aid contributions and travel allowances (where applicable).

Guaranteed package (excluding bargaining unit employees)

Description

Guaranteed package (GP) offered to people on a total remuneration package basis (TRP) comprises base pay, allowances, retirement and medical benefits. It is reviewed annually based on personal performance (KPIs linked to individual performance agreements (IPA) for each TRP employee which is agreed to at the commencement of every year), business performance (linked to budget), behaviours aligned with company values and market competitiveness (national and sector benchmarks).

Benchmarks

Benchmarking for executive directors and non-executive directors is based on a comparator group of companies and is reviewed on a bi-annual basis. The comparator group is determined using the closeness metric formula. This closeness metric is constructed to measure how similar a candidate company is to the company and is based on:

• Total assets
• Turnover
• Earnings before interest, tax, depreciation and amortisation (EBITDA).

The comparator group for 2022 has changed from 2021 to include more manufacturing and food companies, which are more relevant to our industry.

Companies included in the 2022 comparator group comprise:

Factor		Executive directors						Rest of Exco, senior management and below
Survey type		Bespoke survey Public data of South African companies listed on the JSE, based on the closeness metric is used to determine an appropriate comparator group						REMchannel® survey
Comparator group*		The Foschini Group AVI Clicks Group KAP Industrials Holdings		Dischem Massmart Holdings Mr Price Group Pick n Pay Stores		RCL Foods Oceana Woolworths Barloworld Tongaat Hulett Libstar		National and consumer goods circles

* From FY20 the comparator group for executive directors and non-executive directors’ remuneration benchmarking has been merged.

2021 comparator group:
Factor		Executive directors						Rest of Exco, senior management and below
Survey type		Bespoke survey Public data of South African companies listed on the JSE, based on the closeness metric is used to determine an appropriate peer group						REMchannel® survey
Comparator group*		Aspen Pharmacare Ltd AVI Ltd Clicks Group Ltd Distell Group Ltd		Imperial Holdings Ltd Massmart Holdings Ltd Mr Price Group Ltd Pick n Pay Stores Ltd		RCL Foods Ltd The Spar Group Ltd Woolworths Holdings Ltd		National and consumer goods circles

* From FY20 the comparator group for executive directors and non-executive directors’ remuneration benchmarking has been merged.

Short-term incentive

Description and link to strategy

The primary intention of the STI is to improve business performance by focusing participants’ attention on annual key financial, strategic, functional and personal performance objectives (KPIs based on a balanced scorecard), which are aligned with the long-term business strategy for sustainable value creation. This drives high performance by explicitly creating line of sight in linking group, business unit and individual performance.

• All permanent employees on a guaranteed package in Paterson grades CU and above, are eligible to participate
• The STI is paid annually in cash to qualifying people who are employed by the organisation on the payment date
• The on-target percentage (as a percentage of guaranteed package) is benchmarked against the South African market to ensure we are aligned with market best practice. The STI payment is based on affordability and on achieving the defined objectives
• The STI outcomes are determined based on a multiple of the on-target STI, which comprises three performance factors, reflecting the three dimensions of performance that is expected from employees:
  » A group performance factor focused on group financial and non-financial metrics
  » A business unit performance factor focused on business unit financial and non-financial metrics
  » An individual performance factor focused on individual performance objectives and allows for differentiation in rewarding high performers.

Payment of an STI is subject to the overriding condition that the group/business unit meets or exceeds the agreed entry threshold in respect of its earnings before interest and tax (EBIT).

Calculation

Pre-determined weightings will be applied to each of the performance factors. In respect of the individual performance factor, participants will be rated on a rating scale ranging from 1 (poor performer) to 5 (exceptional performer). The remuneration committee has final discretion over the approval of STI payments.

Target and maximum

In FY23 the following ranges of STI awards will apply to the various categories of people covered by this report:

	On-target percentage of guaranteed package	Maximum of on-target percentage
CEO, CFO, and executive directors	60	200
Executive committee members	60	200
Other participants (Paterson grades CU to E band)	8,5 to 50	200

Group and business unit performance factors

The underlying values and weightings for each KPI are set and approved by the remuneration committee in advance of each year to determine parameters for the STI in the form of a balanced scorecard. Below is the group STI scorecard for FY23 that will be applied to the CEO, CFO, executive directors, executive committee members and other participants:

Strategic objective			Strategic objective weighting			Key performance indicator			Key performance indicator weighting			Threshold score = 50%			On-target score = 100%			Stretch score = 200%
Growth1, 2			57,5%			Sales volume growth			5%			92%			100%			150%
						Brand health			7,5%			96%			100%			104%
						FY23 Innovation NS delivery			5%			90%			100%			120%
						FY24 to FY26 Innovation pipeline value						93%			100%			114%
						EBIT			40%			96%			100%			107%
Efficiency1, 2			10%			Overall equipment effectiveness (factor in waste)			5%			Improvement in overall equipment effectiveness year-on-year
												78%			100%			144%
									5%			Continuous Improvement (Rm)
												89%			100%			122%
People and sustainability1			32,5%			Quality			10%			Reduction in complaints year-on-year
												86%			100%			129%
						Safety (LTIFR)			10%			Reduction in lost time injuries year-on-year
												105%			100%			88%
						Carbon emissions			5%			67%			100%			150%
						Talent pipeline						67%			100%			150%
						Time to fill			7,5%			122%			100%			78%
						Vacancy fill						89%			100%			111%

1	The actual targets have not been provided as they are linked to budget and considered commercially sensitive information.
2	For each of the key performance indicators within growth and efficiency, the targeted percentages for “threshold”, “on-target” and “stretch” represent the targeted percentage achievement of the underlying budgeted amounts.

The group, business unit and individual performance weightings applicable to the various employee categories are detailed below:

Employee category	Group	Business unit	Individual
CEO, CFO and executive directors	80%	0%	20%
Executive committee members	80%	0%	20%
Other participants (Paterson grades CU to E band)	0% to 40%	40% to 80%	20%

Long-term incentive plan

Description

The LTIP is aligned to our reward approach and operating model, taking into consideration the following principles:

• Strengthen our ability to competitively attract and retain talent to enable the execution of our business strategy
• Align Tiger Brands’ leadership performance to our long-term strategy and, in particular, to unleashing the power of our people objective.

Employees in Paterson grade D and above may be eligible to participate in the annual awards of the LTIP.

The table below provides further details regarding the performance shares (conditional rights to shares) and restricted shares (conditional rights) awarded under the LTIP:

Instrument		Performance shares					Restricted shares
		Employee category		Performance shares multiple			Employee category		Restricted shares multiple
Award mechanism		CEO CFO Executive committee members Senior management and below		81,3% 81,3% 61,0% 10,6% – 27,7%			CEO CFO Executive committee members Senior management and below		– – – 8,2% – 22,9%
Frequency of awards		Awards are generally made once a year in December as part of the annual review process					Awards are generally made once a year in December as part of the annual review process
Performance multiplier		A personal performance multiplier is used to modify the standard quantum of performance shares and restricted shares, based on an individual’s personal sustained performance and potential This is based on a 9-box matrix taking performance over the last three years into account and a percentage ranging from 0% to 150% is applied on award					A personal performance multiplier is used to modify the standard quantum of performance shares and restricted shares, based on an individual’s personal sustained performance and potential This is based on a 9-box matrix taking performance over the last three years into account and a percentage ranging from 0% to 150% is applied on award
Calculation of award quantum		(GP x performance share multiple/share price) x performance multiplier					(GP x restricted share multiple/share price) x performance multiplier
Vesting		Three-year vesting based on anniversary of award and achievement of performance conditions					Three-year time-based vesting based on anniversary of grant
Performance conditions applicable to performance shares		HEPS growth (weighted at 50%): 0 – less than CPI + GDP 25% vesting (threshold) – CPI + GDP 100% vesting – CPI + GDP +2% 200% vesting (stretch) – CPI + GDP +4% The HEPS calculation is performed on an annual compound basis over the three-year vesting period. Linear vesting to apply between threshold and stretch. ROIC – (weighted at 50%): 0 – less than WACC +1% 25% vesting (threshold) – WACC +1% 100% vesting – WACC +2% 200% vesting (stretch) – WACC +5% and above The measurement will be the average ROIC over the three-year vesting period. Linear vesting to apply between threshold and stretch.
Share price		Based on the volume-weighted average price (VWAP) for a Tiger Brands share calculated for the 10-trading day period ending immediately prior to the date of award/grant.					Based on the volume-weighted average price (VWAP) for a Tiger Brands share calculated for the 10-trading day period ending immediately prior to the date of award/grant.

Historical LTIP information

The following LTIP instruments were discontinued. However, eligible employees still have exposure to these instruments through previous allocations, which include:

• Restricted shares issued as bonusmatching shares (full value shares with a three-year vesting period, no performance criteria). The last grant of bonus-matching shares was made on 6 December 2018. These shares have been settled in FY22.
• Share appreciations rights (SARs). The last allocation of SARs was made on 5 June 2019. The SARs vest over a five-year period, subject to the achievement of the applicable vesting criteria, namely real HEPS growth (50%) and ROIC (50%). The performance measurement of the last tranche of SARs will be performed in FY24.

BEE shares

The following two schemes were established as part of the company’s black empowerment strategy:

• Tiger Brands Black Managers Trust (BMT I)
  » Established in 2005 to attract and retain diverse talent
  » Rights allocated – Tiger Brands shares. Rights are settled after making the required capital contributions to BMT I. For all rights allocated on or before 31 July 2010, settlement may take place at any time after the    initial lock-in period, ie, from 1 January 2015. For all rights allocated after 31 July 2010, the lock-in date varies depending on the date of allocation. Periodically, new allocations are made to new joiners and top-up    allocations are made to existing participants promoted to higher grades out of shares that may become available as a consequence of forfeitures
  » The scheme made its final allocation in August 2022
• Thusani Trust
  » Established in 2005 as part of the company’s BEE phase I empowerment initiative. The trust’s resources were enhanced in 2009 under the company’s BEE phase II transaction
  » The trust provides bursaries for tertiary education to dependants of permanently employed black people who might not otherwise be able to afford this cost.

Dilution

The maximum aggregate number of shares that may be acquired by participants under the LTIP scheme and any other share plan may not exceed 5,5 million shares, and for any one participant 550 000 shares. In determining these limits, shares acquired through the JSE and transferred to participants are not considered. At 30 September 2022, the aggregate number of shares that may be acquired by participants under the various schemes was 2 557 731 (2021: 2 634 230), which represents approximately 1,4% of the number of issued ordinary shares. This is in line with JSE regulations.

Minimum shareholding policy

We have a minimum shareholding policy, where senior executives are expected to build up their personal shareholding in the company over a specific period. In the case of the CEO, the target is 200% of guaranteed package while the target for executive directors and members of the executive committee is 100% of guaranteed package. Senior executives who were in service when the policy was adopted in 2016 have six years to build up their shareholding from date of adoption. Senior executives appointed after adoption have six years to build their shareholding from date of appointment. They may use any vesting LTIs or their own resources to acquire these shares.

Exemption from compliance with the minimum shareholding requirements

In the case of the minimum shareholding requirement not being met, the board retains the overriding discretion to:

• Vary the minimum shareholding level or extend the determination date for an individual executive or the executives as a whole. This will only be allowed to apply in exceptional circumstances
• Determine that an executive has complied with the policy even if the number of shares held by an executive does not meet the minimum shareholding requirements. Such an exemption will only be allowed in exceptional circumstances where compliance will result in severe financial difficulty for an executive or prevent an executive from complying with an order of a court of law.

Malus and clawback

With respect to malus, if the remuneration committee, in consultation with the board and/or any committee of the board, believes that a trigger event has occurred, it has full discretion to reduce, in part or whole, unvested variable remuneration (ie STIs and LTIs) before the end of the vesting or payment period. In the case of clawback, it is the responsibility of the remuneration committee, in consultation with the board and/or any committee of the board, to implement clawback for the whole or portion of vested variable remuneration in the event of a trigger event occurring over a period of three years from the date on which payment was made of such vested variable remuneration. Trigger events include, but are not limited to:

• Material misstatement of financial results
• Misconduct, incompetence, fraud, dishonesty
• Negligence or material breach of obligations to the company
• Deliberate harm to the company’s reputation
• Material failure of risk management.

Illustrating potential remuneration outcomes

The variable pay arrangements described above have various potential outcomes. These outcomes could be from zero (minimum) to the expected level of performance outcomes (target) to the maximum potential variable pay outcomes (capped at the maximum). In the illustrations presented below, it should be noted that:

• STI represents the cash component of short-term performance
• LTIP represents the total award of performance vesting shares.

Total remuneration potential for members of executive management for the year ended 30 September 2022

CEO (R’000)

CFO (R’000)

Members of executive committee (average) (R’000)

Executive service contracts

Senior executives are employed full-time under standard agreements, with a notice period of three months. We strive to bind all senior executives by a restraint-of-trade agreement. To the extent that executives have access to proprietary business insights and intellectual property, Tiger Brands will enforce the agreement should they join a competitor. The restraint comprises a three-month notice period or three months’ special leave (paid as a three-month lump sum (based on guaranteed package) on termination).

Sign-on and specific retention payments

In exceptional circumstances (mainly for the recruitment and retention of critical and/or scarce talent), Tiger Brands will award a sign-on/retention payment which will be subject to the following conditions:

• Employees remaining in the service of Tiger Brands as a permanent employee for an uninterrupted period of 24 months from date of the payment. Should the employee or Tiger Brands decide to terminate the employment relationship for any reason, excluding those listed below, before the expiration of 24 months, the employee will be required to repay Tiger Brands the full gross amount. There will be no pro rata refunds. Should Tiger Brands terminate the employment relationship because of operational reasons (for example, retrenchment or redundancy) or ill health, or if termination occurs as a result of death, the employee will not be required to repay Tiger Brands.

Payments on termination of employment

Remuneration policy component		Voluntary termination (ie resignation)			Involuntary termination (retrenchment, retirement, death)
Guaranteed package		Paid up to last day of service			Paid up to last day of service including notice period, where applicable.
Medical aid		Benefit continues to last day of service			Benefit continues up to last day of service. Employees who qualify for post-retirement medical aid funding will continue to receive the employer contribution with effect from their normal retirement date.
Retirement and risk plans		Employer contributions paid until last day of service. Employee is entitled to the value of the investment, but all risk benefits cease on termination of service.
Other benefits		Not applicable			Severance package in respect of retrenchments – one or two weeks for every completed year of service in terms of the relevant rules.
Short-term incentives		No pro rata bonus paid			Pro rata STI payment (based on extent of achieving specified financial and strategic targets for the period and a personal performance agreement being in place at the date of exit).
Long-term incentives		All unvested awards			Depending on the nature of the instrument and reasons for termination, a participant may retain all units or a pro rata portion. Accelerated vesting and settlement of retained units may apply in certain circumstances.

External board appointments

Under a formal policy, an executive is limited to one substantive outside directorship. The chairman of the Tiger Brands’ board, chairman of the nominations committee, and chairman of the remuneration committee are required to authorise these appointments based on a recommendation from the CEO. Other than in respect of their appointment to the boards of associate companies, directors’ fees under this policy may be retained by the individual. Tiger Brands currently has one executive member serving as non-executive director on the main board of a listed company.

Non-executive directors

Fees and approval process

Non-executive directors are paid an annual retainer that reflects their overall contribution and input to the company, and not just for attendance at board and committee meetings. Fees are also paid on an hourly basis for approved, ad hoc meeting attendance. Fees are reviewed annually, and increases are implemented in April after approval at the relevant AGM.

A benchmark analysis is conducted annually against an agreed comparator group of South African companies listed on the JSE, based on market capitalisation, turnover and total assets. As these are similar metrics to that of the benchmark group for executive directors it was decided that from FY20, in line with King IV^TM and in terms of the current requirements of the organisation, a single comparator group be adopted for the non-executive directors and executive directors’ remuneration benchmarking. The revised comparator group is detailed here.

Targeted remuneration for the 12-month period ending 28 February 2023 was based on the 65th percentile of the comparator group, which is aligned with our internal anchor point. Non-resident non-executive directors are paid a premium in comparison to resident directors, which is below the market median. The chairman does not receive any additional remuneration for participating in committees of the board. Non-executive directors who perform services outside the scope of their ordinary duties will not receive additional remuneration. Shareholder approval will be sought for increasing non-executive directors’ fees, including fees paid for attending special board meetings. Details of proposed non-executive directors’ fees effective from 1 April 2023 appear in the notice of AGM of shareholders to be held on 21 February 2023. Details of non-executive directors’ fees paid in the review period appear here.

Voting statement

This remuneration policy is subject to a non-binding advisory vote by shareholders at the upcoming AGM.

SECTION 3: IMPLEMENTATION REPORT

In this section of the remuneration report we explain the implementation of our remuneration policy, providing details of the remuneration paid to our executive directors and members of the executive committee for the financial year ended 30 September 2022.

Salary adjustments

In 2021 the remuneration committee approved a 4,5% annual increase effective December 2021. The only exceptions to this were the negotiated increases for bargaining unit employees and specific increases to reward high performance, retain critical skills and address the remuneration objective of fair and responsible pay in the CL and below employee population during the financial year.

The executive directors received an annual increase but did not receive an STI payment in FY21 whereas all other eligible employees received an annual increase and STI payment.

2022 guaranteed package

The following increases to guaranteed packages were implemented in the reporting period for executive directors. New amounts were effective as indicated below:

	1 Dec 2021 to 30 Nov 2022	1 Dec 2020 to 30 Nov 2021	% increase
Executive directors
NP Doyle	10 400 000	10 000 000	4%
DS Sita	6 600 000	6 000 000	10%

FY22 retention awards

In December 2021, in order to address the high attrition rates as well as mitigate against the risk of vacancies in key positions, a retention mechanism was implemented. The executive committee, excluding the CEO, received once-off retention awards.

• The CFO did not receive an upfront cash retention payment but was awarded a combination of performance vesting and restricted shares which are summarised here. The retention LTIP award made to the CFO took into account the critical leadership role that the finance discipline, together with other operational and functional leads, plays in executing the company’s strategy. More specifically, consideration was given to the CFO’s diverse strategic and transformational portfolio, which includes information technology and group procurement, which are fundamental to ensuring business value across the enterprise, as well as her role as an executive director of the company. To this end, the retention award took the form of LTIs, combining Performance Vesting Shares and Restricted Shares, with both instruments subject to a vesting period of three years. The combined award amounted to a total value of R14,8 million. The quantum of the award had to be significant enough to create the retention benefit required to ensure a three-year retention. The vesting criteria for these retention awards are set out here.

• Each of the other members of the executive committee (excluding the CFO) received:
  » An upfront cash retention payment equal to either 50% or 75% of an executive’s TRP for one year. In turn, the executive agreed to a two-year lock-in period. In the event that the executive exits the company prior to    expiry of the retention period, the upfront payment is repayable in full (gross of taxation). The upfront cash retention payments amounted to R24,1 million
  » An allocation of LTIs split between restricted shares at a maximum allocation of 75% and performance shares at a minimum allocation of 25%, the face value of which was determined in accordance with the principles    as outlined in the table here. These LTIs were allocated in lieu of the annual award of performance shares. The vesting criteria for these retention awards are set out here.

2022 short-term incentive

As indicated in the policy section, the STI for executive directors is based on the combination of a group performance factor and individual performance component.

Executive directors

The group performance factor for executive directors is weighted according to the table below. Results for FY22 were as follows:

 

																					Achievement
Strategic objective			Strategic objective weighting			Key performance indicator			Key performance indicator weighting			Threshold score = 50%			On-target score = 100%			Stretch score = 200%			Actual result			Weighted result
Growth			65%			Sales volume growth			10%			92%			100%			108%			0,9%			0,00%
						Brand health*			7,5%			98%			100%			105%			26,3%			0,00%
						Innovation			7,5%			92%			100%			108%			4,3%			0,00%
						EBIT			40%			95%			100%			105%			R3,3 billion			70,28%
Efficiency			10%			Overall equipment effectiveness (factor in waste)			5%			Improvement in overall equipment effectiveness year-on-year
												80%			100%			120%			3,2%			0,00%
									5%			Material usage variance (Rm)
												85%			100%			115%			74,14%			10,00%
People and sustainability			25%			Quality			10%			Reduction in complaints year-on-year
												83%			100%			125%			14%			16,67%
						Safety (LTIFR)**			10%			Reduction in lost-time injuries year-on-year
												108%			100%			92%			73%			0,00%
						Leadership positions filled internally			5%			80%			100%			120%			40%			2,65%
																								99,59%

*	Brand health is measured on an individual category and not on an aggregated basis.
**	The safety KPI has a disqualifier linked to it and even though “Stretch” target was achieved, due to a fatality on a site, the safety KPI (LTIFR), as shown in the table above, was not met by the group.

The targeted percentages for “threshold”, “target” and “stretch” as set out above per KPI represent the targeted percentage achievement of the underlying budgeted amounts.

Linear vesting will apply if the actual result falls between “threshold” and “target” or between “target” and “stretch”.

Individual performance

Executive directors individual KPIs are aligned to the group’s KPIs. FY22 group KPIs and their achievement are listed above. The individual performance factor for executive directors is weighted according to the table below. The results for FY22 were as follows:

		NP Doyle					DS Sita
Key indicators	Not met	Partially met	Met	Exceeded	% achievement of target	Not met	Partially met	Met	Exceeded	% achievement of target
Individual KPIs

Name	GP*		On-target %		Actual group performance factor %		Actual individual performance factor %	2022 STI (Rand)	2021 STI (Rand)
NP Doyle	10 400 000	x	60%	x	99,59%	+	100%	6 219 647	–
DS Sita	6 600 000	x	60%	x	99,59%	+	130%	4 184 683	–

* Annual guaranteed package in rand as at 30 September 2022.

2022 long-term incentives

In FY22, performance shares were awarded to executive directors, executive committee members, senior management and middle management. Grants of specific retention shares were also made to selected senior management and key people whose contribution has been identified as being critical to achieving our business strategy.

Long-term incentive awards made during the year to executive directors are set out below:

Long-term incentive awards to executive directors for FY22

			Performance shares
Name	LTI personal  performance  multiplier1	GP  (R)	Award %	Number	Face value  (R)	Expected  value(R)
NP Doyle	150%	10 400 000	81,3	69 700	12 683 309	15 600 470

1	The personal performance multiplier is used to modify the standard quantum of performance shares and restricted shares, based on an individual’s personal sustained performance and potential. This is a percentage ranging from 0% to 150%.
2	Allocated on 15 December 2021 at VWAP of R181,97.

Retention awards

Name	GP  (R)	Number	Face value  (R)	Expected  value  (R)
		Restricted shares
DS Sita	6 600 000	72 540	13 200 103	11 880 093
		Performance shares
DS Sita	6 600 000	9 220	1 677 763	2 063 648

1	Allocated on 15 December 2021 at VWAP of R181,97.

LTI awards vesting or with a performance period ending in FY22

The outcome for awards due to vest in FY22, and whose performance conditions ended by 30 September 2022, are shown below. This applies to all eligible participants.

LTI allocation	LTI measures Real HEPS growth	Performance condition result % vesting
Bonus-matching shares granted in FY19	N/A	100% (time-based vesting)
Share appreciation rights granted in FY17 – third tranche		–
Share appreciation rights granted in FY18 – second tranche		–
Share appreciation rights granted in FY19 – first tranche		–

Current minimum shareholding summary

Name	Date of engagement	GP1 (R)	Number of shares held	Original value  of shares held  (R)	Current value  of shares held2 (R)	Original value as % of GP	Target % of GP	Years remaining to meet target
NP Doyle	1 July 2012	10 400 000	12 775	4 199 926	2 164 596	40	200	0
CXO1	5 December 2016	4 114 240	7 373	1 638 700	1 249 281	40	100	0

1	GP as at 30 September 2022.
2	Value calculated with reference to the closing price of a Tiger Brands’ share as at 30 September 2022, ie R169,44.

Payments for termination of office

No additional payments were made for executives terminating office.

Compliance with remuneration policy

There were no deviations from the remuneration policy in the financial year.

Single total figure of remuneration

The following tables disclose total remuneration received and receivable by executive directors and executive management for the period 1 October 2021 to 30 September 2022:

Executive directors

	NP Doyle			DS Sita
Remuneration element	FY22  (R’000)	FY21  (R’000)	% change	FY22  (R’000)	FY21  (R’000)	% change
Basic salary	8 878	8 591		5 938	4 957
Retirement funding	1 455	1 409		330	335
Other benefits	–	–		245	228
Guaranteed package	10 333	10 000		6 513	5 520
Short-term incentive	6 219	–		4 184
Cash remuneration	10 333	10 000		6 513	5 520
SARs	–	–		–	–
Bonus matching shares	–	–		–	–
Deferred bonus shares and company matching shares	–	–		–	–
Cash sign-on bonus	–	–			1 818
Total remuneration	16 552	10 000	65,5	10 697	7 337	45,8

Member of executive committee

Key	FY22  (R’000)	FY21  (R’000)
CXO1	8 605*	3 956
CXO3	11 551*	4 985
CXO4	12 671*	3 044
CXO5	3 768	4 565
CXO6	13 774*	5 513
CXO7	1 314	5 347
CXO8	10 770*	4 221
CXO13	15 077*	4 820
CXO14	2 777	3 433
CXO15	7 399*	–
CXO16	9 723	6 500
CXO17	1 635	–
Total	99 064	46 384

Notes:
CXO4 rejoined on 1 November 2021.
CXO5 resigned 31 May 2022.
CXO7 resigned 31 December 2021.
CXO14 resigned 31 December 2021.
CXO15 appointed as executive on 1 January 2022.
CXO16 fixed term contract – FY22 remuneration includes FY22 STI payable in December 2022.
CXO17 acted for the period May 2022 to December 2022 – includes FY22 STI payable in December 2022.
* Includes retention payments made in December 2021 of R24,1 million as well as FY22 STI payable in December 2022 of R36,1 million.

Number and value of LTI share awards

Disclosure of the quantum and value of awards for the CEO and CFO outstanding at the beginning and end of the reporting period, as well as new awards made in the period, are provided in the tables below, with the cash value of awards settled during the reporting period indicated in the value-based tables.

Name and awards

Award date

Vesting date

Grant price  (R)

Opening number

Granted during the year

Forfeited during the year

Performance condition achieved

Settled during the year

Closing number

Face value  at award  (R)

Cash  received  (R)

Value of shares acquired

Closing  fair value  vesting  (R)

NP Doyle

FY20 performance shares

07/09/2020

07/09/2023

–

65 880

–

–

–

–

65 880

11 741 792

–

–

10 741 734

FY21 performance shares

04/12/2020

04/12/2023

–

59 930

–

–

–

–

59 930

12 195 755

–

–

9 711 057

FY22 performance shares

15/12/2021

15/12/2024

–

–

69 700

–

–

–

69 700

12 683 309

–

–

10 827 198

FY17 SARs

07/12/2016

07/12/2021

368,11

12 112

–

12 112

–

–

–

–

–

–

–

FY18 SARs

11/12/2017

11/12/2021

385,29

16 433

–

16 432

–

–

–

–

–

–

–

11/12/2022

385,29

16 433

–

–

–

–

16 434

6 331 471

–

–

657

FY19 SARs

06/12/2018

06/12/2021

254,79

18 895

–

18 895

–

–

–

–

–

–

–

06/12/2022

254,79

18 896

–

–

–

–

18 896

4 814 512

–

–

72 372

06/12/2023

254,79

18 897

–

–

–

–

18 897

4 814 767

–

–

73 131

Total

227 476

69 700

47 439

–

–

249 736

52 581 606

–

–

31 426 149

DS Sita

FY21 performance shares

04/12/2020

04/12/2023

–

31 680

–

–

–

–

31 680

6 446 880

–

–

5 133 427

FY22 performance shares

15/12/2021

15/12/2024

–

–

9 220

–

–

–

9 220

1 677 763

–

–

1 432 235

FY22 restricted shares

15/12/2021

15/12/2024

–

–

72 540

–

–

–

72 540

13 200 104

–

–

11 268 364

Total

–

31 680

81 760

–

–

–

113 440

21 324 747

–

–

17 834 026

Interests of executive directors in B-BBEE schemes

DS Sita was awarded shares in terms of the black managers trust scheme for the year ended 30 September 2022.

Name and awards	Award date	Vesting date	Opening number	Granted during the year	Forfeited during the year	Settled during the year	Closing number	Face value  at award1 (R)	Cash  received  (R)	Value of shares acquired	Closing  fair value  vesting2 (R)
DS Sita
Tiger Brands share allocation	31/01/2021	31/01/2024	2 333	–	–	–	2 333	334 995	–	–	290 272
		31/01/2025	2 333	–	–	–	2 333	334 995	–	–	290 272
		31/01/2026	2 334	–	–	–	2 334	335 139	–	–	290 396
Adcock Ingram share allocation3	31/01/2021	31/01/2024	1 983	–	–	–	1 983	63 278	–	–	66 867
		31/01/2025	1 983	–	–	–	1 983	63 278	–	–	66 867
		31/01/2026	1 984	–	–	–	1 984	63 309	–	–	66 900
Oceana share allocation3	31/01/2021	31/01/2024	603	–	–	–	603	30 554	–	–	24 174
		31/01/2025	604	–	–	–	604	30 605	–	–	24 214
		31/01/2026	604	–	–	–	604	30 605	–	–	24 214
Total			14 761	–	–	–	14 761	1 286 758	–	–	1 144 176

1	Calculated with reference to the market value of an allocated share (less the amount of the capital contribution) as at the date of the award.
2	Calculated with reference to the market value of an allocated share (less the amount of the capital contribution) as at year end (30 September 2022).
3	In addition to the award of the Tiger Brands shares, the executive was also awarded Adcock Ingram and Oceana shares (as a consequence of the unbundling by Tiger Brands of its interests in Adcock Ingram and Oceana, the Tiger Brands Black Managers Trust, as Tiger Brands shareholder, also became a shareholder of shares in Adcock Ingram and Oceana). Participants in the Trust are, consequently, also awarded shares in these two companies when awarded Tiger Brands shares.

Non-executive directors’ remuneration 2022

The non-executive directors’ remuneration paid for the year ended 30 September 2022 is disclosed below, excluding VAT in rand:

Committee	MO Ajukwu	MJ Bowman	FNJ Braeken	CH Fernandez	GJ Fraser-Moleketi	GA Klintworth	M Makanjee	TE Mashilwane	M Sello	OM Weber	DG Wilson	LA Swartz
Notes		1	2				3					4
Board fees	1 020 626	217 500	520 376	443 750	2 119 464	1 020 626	108 750	443 750	443 750	1 020 626	443 750	113 125
Audit committee fees			232 416						198 212		198 212
Investment committee fees				14 262				23 406		53 834	23 406
Remuneration committee, nomination and governance committee fees		122 948					28 711	59 700		137 310	185 272	29 850
Social, ethics and transformation committee fees	126 500					245 964	50 729	182 200	106 942
Risk and sustainability committee fees	361 358		184 230	157 112		184 230			308 030	361 356
Extraordinary fees in respect of special board meeting	54 984		54 984	23 906	23 906	54 984		23 906	23 906	54 984	23 906
Ad hoc work/meetings
Total FY22	1 563 468	340 448	992 006	990 714	2 143 370	1 505 804	188 190	732 962	1 080 840	1 628 110	874 546	142 975
Total FY21	1 460 495	754 303		1 027 821	1 713 171	1 345 170	798 733	713 327	908 565	1 440 285	868 442

1.	MJ Bowman retired 16 February 2022.
2.	FNJ Braeken appointed 1 April 2022.
3.	M Makanjee retired 31 December 2021.
4.	LA Swartz appointed 1 June 2022.