CORPORATE GOVERNANCE REVIEW
for the year ended 31 March 2019
Letter from the chair of the remuneration committee
Adv K Moroka
On behalf of the remuneration committee, I am pleased to present our first remuneration report for MultiChoice Group Limited (MCG).
In alignment with the requirements of the King IV Report on Corporate Governance for South Africa (King IV) our 2019 remuneration report is divided into three parts:
- Part 1: The background statement: The background statement provides context around the company’s performance and how this influenced remuneration decisions.
- Part 2: The remuneration policy: The remuneration policy is a forward-looking section that provides an overview of our remuneration philosophy and design principles and the remuneration policy that will be applicable in FY2020.
- Part 3: The implementation report: The implementation report is a backward-looking section that discloses the remuneration and performance outcomes of the employees and how much each relevant executive received, based on the FY2019 remuneration policy.
PART 1: THE BACKGROUND STATEMENT
Factors that influenced our remuneration approach
The unbundling of MCG from Naspers and the listing on the JSE Limited (JSE), Johannesburg’s stock exchange in February 2019 was an important milestone in the history of the organisation. This milestone has provided us with new opportunities to design a remuneration approach that is best suited to current market practices and to the nature of our business.
Following the unbundling, the remuneration committee has been actively reviewing our remuneration approach to ensure it is fit for purpose, as well as considering valuable input received from you as shareholders. The key considerations are detailed in Part 2: The remuneration policy.
Externally, the film and entertainment industry is becoming more competitive with global over-the-top OTT players and other competitors making it even more important for us to retain our top talent. Growing our subscriber base remains key to our success. We have positive growth potential in our various geographies and have aligned our reward practices to ensure we are able to deliver the required results.
During the listing process we engaged with our shareholders in order to obtain feedback and guidance regarding our remuneration practices:
|Issue||Remuneration committee response|
|Does management have equity participation to align with shareholder interests?||Share awards under the new MCG share scheme have been issued to all qualifying employees. We have also introduced minimum shareholding requirements.|
|Are there performance metrics in the share scheme?||The new share scheme is a restricted share unit (RSU) scheme. The executive committee have performance conditions linked to half of their units in the form of performance share units (PSUs).|
|Why were executive long-term incentives not included in the pre-listing statement?||At the time of the PLS, the new MCG Trust Deed had not been registered to approve new awards.|
Our approach to remuneration
Our people are at the heart of our success. We focus on reward systems which help us to attract and retain the best talent in a fair and responsible way. Our approach to remuneration is detailed in Part 2, but briefly focus on the following:
|We believe in a pay-for-performance culture that incentivises achievement of strategic, operational and financial objectives, both in the short and long term|
|We continually monitor the level of pay to ensure that it is fair to all our employees and in line with our values|
|We believe remuneration must be aligned with shareholder expectations|
|We structure our reward systems to help us attract and retain the best talent around the world in a responsible way|
|We are consistent; our guaranteed reward package elements are broadly the same across different levels. Variable pay is tailored to be appropriate for each different level|
Talent and fairness
Our intention is to continue to grow as a top employer across the various areas of operations and presence. We focus on recruiting experienced data, digital and content talent into critical areas required to scale our business and deliver on the operating model, but we also provide opportunity for new, young talent to learn and develop. We also strive to recruit and retain the best calibre of executive talent to lead the organisation and deliver the requisite results into the future.
Balancing the levels of executive remuneration with the demands to remain competitive in attracting global talent in the entertainment industry has become challenging.
Positively, our internal talent development practices enabled a strong mix of internal leadership promotions to key positions in the business.
Our collaboration with educational institutions enables recruiting talent early. We have active partnerships with multiple learning institutions and production partners to attract young talent spanning the TV, film, technology, engineering and data science fields.
For experienced hires, our talent acquisition teams are actively driving targeted campaigns to attract talent.
Benchmarking and remuneration advisers
We strive to be consistent, offering reward systems that help attract and retain the best talent in our market. We consider market practices, the needs of the business as well as the calibre of the individual in our recruitment processes.
We benchmark our remuneration using the PwC Remchannel Survey in South Africa, and the Mercer Total Remuneration Surveys in the Rest of Africa. For senior management, which we sometimes recruit globally, we also utilise the LMO Executive Survey and Willis Towers Watson Executive Survey.
We target our guaranteed salary at the median of the market with exceptions based on performance and critical skills.
We have appointed Bowman Gilfillan as our independent remuneration committee advisor and we are satisfied that the advice is objective and independent.
Key areas of focus and key decisions taken during the reporting period
Given the group’s unbundling as a separate listed entity late in FY2019, the remuneration committee was able to meet only once before the financial year-end. However, the following decisions were taken and the remuneration committee is satisfied that it achieved its objectives, as set out below:
- approved the new MCG share scheme principles and guidelines
- approved awards in the MCG share scheme
- approved the executive committee goals and targets for FY2020, and
- approved the new MCG executive remuneration policy.
In FY2020, the remuneration committee will continue to monitor executive remuneration, especially those of direct and indirect competitors. The group’s remuneration policy is detailed in Part 2 of this report.
Role of the remuneration committee
The remuneration committee’s responsibilities are to:
- independently review and monitor the integrity of the group’s remuneration policies and implementation thereof
- ensure that the company remunerates fairly, responsibly and transparently, and
- ensure compliance with the statutory duties of the remuneration committee as contained in relevant legislation.
In fulfilment of these responsibilities, the remuneration committee’s functions include:
- reviewing executive remuneration and benefits, and ensuring the directors and senior management are fairly and responsibly rewarded for their individual contributions to the group’s overall performance
- evaluating the group’s remuneration and benefit competitiveness
- reviewing and approving the overall annual increase pool awarded to the group employees
- approving employment agreements, offers of employment as well as severance agreements for the CEO and the executive committee
- reviewing and monitoring the implementation of the group’s guaranteed and variable pay plans, and making recommendations to the board with respect to new guaranteed and variable pay plans
- reviewing the potential risk in respect of the group’s remuneration and benefit programmes and policies
- annually evaluating and monitoring the group’s remuneration philosophy and practices, and
- actively engaging with shareholders on concerns raised in the event of the remuneration policy or implementation report, or both, receiving an ‘against’ vote of 25% or more of the voting rights exercised at any shareholders’ meeting.
Non-binding advisory vote on remuneration policy and implementation report
The remuneration policy and implementation report as set out in Part 2 and Part 3 of this remuneration report will be tabled for separate non-binding advisory votes at the annual general meeting on 29 August 2019. In the event that 25% or more of the voting rights exercised, vote against either the remuneration policy or implementation report or both, the board will take steps, in good faith and with best reasonable effort, to do the following as a minimum:
- implement an engagement process to ascertain the reasons for the dissenting votes, and
- appropriately address legitimate and reasonable objections and concerns that have been raised, which may include amending the remuneration policy, or clarifying or adjusting remuneration governance and/or processes.
In addition, in the remuneration report published in the year subsequent to the vote, the background statement will set out:
- with whom the company engaged, and the manner and form of engagement to ascertain the reasons for the dissenting votes, and
- the nature of steps taken to address legitimate and reasonable objections and concerns.
PART 2: THE REMUNERATION POLICY
Our remuneration philosophy underpins the group’s strategy and enables us to achieve our business objectives. Our commitment to pay for performance in alignment with shareholder value creation, drives our remuneration activities and supports the ownership mentality and spirit of entrepreneurship in our teams around the world. As far as possible, the structure of our pay is similar across the business and it meets the minimum legal requirements in all the jurisdictions in which we operate. We endeavour at all times to balance the need to compete globally for the best talent with the need to pay fairly and responsibly. We welcome the opportunity to discuss this policy and its outcomes with our stakeholders.
The way we structure pay is purposely linked to our strategy and to the delivery of long-term sustainable growth for our shareholders.
When making executive pay decisions, we consider the individual’s performance and the performance of the business, the complexity of the responsibilities of the executive, and the growth trajectory and life cycle stage of the business for which he/she is responsible.
Our short-term incentives are aimed at rewarding employees for over-performance. These incentives are typically capped at a percentage of an employee’s salary.
Our approach to long-term incentives strives to ensure that executives are invested in driving sustainable performance of the business over the long term.
Our remuneration policy and pay decisions are driven by and linked to the principles below:
We continually monitor the level of fair and responsible pay for all our employees in light of our values, which we have detailed in this report. As a starting point, our minimum salary in South Africa is substantially above the minimum wage requirements set by government and on average 13% higher than the average median salary in market for the same role. We are also proud of the suite of benefits offered to our employees (detailed below), which we believe are highly market competitive.
To ensure a fair and reasonable approach to the remuneration of executive directors, the remuneration committee takes the same approach as for the wider employee group. A number of factors are taken into account, including individual performance, company performance and trading environment, and the relative contribution of the job to the overall business success. Benchmarking to market pay is also an important reference point.
Individual performance and market benchmarks are important determining factors in whether to grant a pay increase. Pay increases are not granted in the absence of a satisfactory level of performance. Similarly, the operational performance of the business and its ability to pay are naturally considered when the quantum of any increase is considered.
Pay for performance is one of the pillars of our reward philosophy. Personal performance (including the financial results of the business) is the determining factor in whether an individual qualifies for a total cost to company (TCTC)/base salary increase and annual performance-related incentive. This incentive is determined on a formulaic basis, which allows limited discretion only in exceptional circumstances.
Our executives are eligible to participate in a performance-related short-term incentive programme. This is an annual programme where having achieved certain preapproved business and personal goals, participants may receive an annual performance-related incentive payment. The incentive payments for our executive directors and prescribed officers based on FY2019 performance is detailed below.
Performance goals are directly aligned with the approved business plans. Personal goals are arrived at as an outcome of the annual business planning process. As budgets and operating plans are designed prior to the end of the financial year, so too are the personal performance goals at an individual level. These goals, if achieved, drive the accomplishment of the financial and operating plan of the business and how it is delivered.
We encourage managers to engage in continuous conversations with their people throughout the year to ensure that their plan is on track. At the end of the financial year both the overall performance of the business, and the individual’s achievement of their personal goals are considered. While we do not force-rank performance scores, we do expect that any performance-related incentive payments reflect the overall performance of the business where appropriate. Individuals who have performed well against their performance-related incentive goals, are eligible to be considered for bonus and a pay increase.
Our remuneration structure
We have outlined the four elements of pay for our executive directors below. The same principles are applied to employees across the company. Our four-tier remuneration structure provides an appropriate balance between guaranteed annual remuneration and variable remuneration, which is directly linked to performance that enhances shareholder value.
These are detailed as follows:
In South Africa, the TCTC comprises salary plus cash and non-cash benefits. Outside of South Africa, base salary excludes cash and non-cash benefits.
Personal performance is the primary driver for pay increases but also factors in the scope and nature of the role, relevant companies in the national, media and technology sectors, and local economic indicators such as inflation and the relevant labour market, to ensure they are fair, sensible and market competitive.
Guaranteed pay is set at a level to ensure we can attract and retain talent of the required calibre and considers market practice as well as an individual’s contribution. Guaranteed pay is reviewed annually, and any increases are typically effective from 1 June each year.
A suite of benefits, which we believe is highly market competitive, is offered to our employees. Examples of these are:
- bursaries for employees and family
- a range of wellness benefits such as onsite health care and counselling, a gym, a concierge service
- work-life balance leave
- closed medical aid scheme and retirement scheme with highly competitive benefits
- onsite crèche and early childhood development allowance, and
- significant DStv discounts for employees and family members.
Short-term incentives (STI)
The STI refers to the annual performance-related incentive. The annual incentive plan pays out depending on performance achieved against strategic, operational and financial objectives.
The purpose of the annual incentive plan is to ensure executive alignment with and focus on delivering the annual business plan. The achievement of these annual plans will cumulatively drive long-term shareholder value over time.
The same structure is applied throughout the organisation to ensure a consistent approach with measures linked to an individual’s role to ensure that pay is linked to their contribution.
Principles for executive bonus
For executives, these targets are set at MCG level and for senior management, these targets are closely linked to the performance of the specific business unit for which they have responsibility.
The performance measures for each executive are tailored to their roles and responsibilities. The incentive plan for each executive is agreed annually in advance and based on targets that are verifiable and aligned to the specific business unit’s annual business plan, risk management policy and strategy.
All eligible employees, including executives, have a target bonus percentage based on their level in the organisation. The target bonus percentage is used to calculate the bonus based on performance against targets.
The remuneration committee ensures that these targets are appropriately ambitious using a number of reference points including the business plans and historic performance.
The calculations and outcomes for FY2019 are detailed in Part 3. For FY2020 the calculation to determine the performance outcome is detailed below. This is to ensure that solid company performance will be required before any individual bonuses are paid:
FY2020 STI calculation:
Performance % outcome is calculated as follows:
|Performance % outcome|
For FY2020, the company performance measures, weightings and their respective targets are set out below:
|Revenue||25||1% below budget||On budget||1% above budget|
|Core headline earnings||25||10% below budget||On budget||10% above budget|
|Free cash flow||25||5% below budget||On budget||5% above budget|
|Subscriber growth||25||5% below budget||On budget||5% above budget|
Linear interpolation will apply between targets with 0% payment occurring for below-threshold performance and maximum payment occurring for stretch performance.
Long-term incentives (LTI)
The table below sets out both the legacy Naspers LTI schemes and the current and new MCG LTI schemes:
stock units (RSUs)
|Detail of award||A right to buy a Naspers share at a pre-agreed price.||An award of Naspers shares that is transferred to participants after time restrictions have passed.||A right to benefit from any increase in value of the business unit over which an award is made.||An award of MCG shares that is registered to the participants subject to an employment condition (continued tenure). For the executive committee, achievement of performance conditions applies.|
|Value delivered to participant||Change in share price between grant and vest.||Full value delivered to the participant.||Change in value of business unit between grant and vesting.||Full value delivered to the participant.|
If there is no change or a decrease in value, there is no gain for the participant.
Naspers shares delivered on vesting.
|Naspers shares delivered on vesting.||
No new awards to be made.
Current awards will vest in line with current vesting profile.
The MultiChoice SARs vest over five years (one third in year three, four and five respectively), while the Irdeto SARs vest in equal tranches over four years.
If there is no change or a decrease in value, there is no gain for the participant.
Gains settled in MCG shares.
Vests over five years. Awards will vest in four equal tranches from year two (25% vesting in each year).
Executive committee awards are split 50:50 between RSUs and RSUs with performance conditions (PSUs).
The executive committee are to hold one time their annual salary in vested shares by FY2024.
Settlement of the awards will take place on the respective vesting date of the awards and at the discretion of the board.
The unbundling of the MultiChoice group from Naspers allowed us to reconsider the best approach with regards to LTIs in our business. At the same time, the legacy share schemes were accelerated or closed for new awards.
Our legacy share schemes comprise MultiChoice and Irdeto share appreciation rights (SARs) and Naspers awards. No further awards will be granted under the MultiChoice and Irdeto SARs schemes, however, previous awards granted under these schemes will continue to vest as per the rules of the schemes.
The Naspers schemes were accelerated in line with the plan rules.
New MCG scheme
Through the listing process a new MCG share scheme was approved. In terms of the new LTI scheme, executive directors, senior management and other critical employees are eligible to receive long-term incentives, in the form of restricted share units, vesting over a five-year period (equal vesting between years two and five). This plan creates an alignment between executive pay and shareholder interests, with participants being rewarded for their contribution to the performance of the business.
At the executive committee level, performance conditions are linked to the performance share units (PSUs) in order to align LTI closer to the performance of the business and shareholder value creation. The executive committee is required to hold a minimum of one time their annual pay in vested shares by FY2024.
Dividends are not payable on unvested shares.
A robust governance process is in place to ensure that the LTIs are appropriately awarded and administered. Awards are normally granted annually.
The executive directors and prescribed officers participate in the new MultiChoice Group RSU scheme and they retain the MultiChoice SARs which will vest in line with the original rules. All Naspers options were accelerated and vested in line with the plan rules (details in Treatment of Naspers options).
Performance conditions for the executive committee (applicable to the new MCG scheme for awards from FY2020)
The executive committee has performance conditions linked to half of their RSUs in the form of PSUs. The performance measures, weightings and their respective targets are set out below. Performance measures are calculated based on a range and the vesting of shares is dependent on how the group delivers within this range, using the latest approved business plan prior to the issue of share awards as a base. Performance metrics are measured on a two-year basis as it coincides with the first vesting period of 25% and is aligned with our business planning cycle:
|Performance measure||Weighting||Performance levels|
|Core headline earnings per share (Core HEPS)||25%||5% below budget||On budget||5% above budget|
|Free cash flow||50%||5% below budget||On budget||5% above budget|
|Return on capital employed||25%||5% below budget||On budget||5% above budget|
Linear interpolation will apply between the vesting levels.
The maximum aggregate number of shares that may be awarded under the LTI plans is limited to 10% of the total issued shares of MultiChoice Group and on an individual participant basis, no more than 1% of the total issued shares may be awarded.
LTI award policy
|Employee level||LTI awarded|
|Executive committee||50% PSUs and 50% RSUs, to create alignment with shareholders’ interests|
|Heads of departments||RSUs|
|Senior managers/Specialists||RSUs for high potential and key skills/specialists|
|Product/Tech/Content specialists||RSUs for key skills/specialists|
|Death, ill health, disability, retirement or any other event approved at sole discretion of the board||All unvested awards will be accelerated and vest on a pro rata basis on the date of termination of employment. As an example, if two years have elapsed since grant then this will result in 40% of the award vesting. If applicable, the outcomes of PSUs are reviewed by the remuneration committee on a case-by-case basis|
|Redundancy or termination as a result of a business disposition/change of control or jurisdictional issue||Vesting of the awards will be accelerated on a pro rata basis. If applicable, the outcomes of PSUs are reviewed by the remuneration committee on a case-by-case basis|
|For other causes||All unvested awards will lapse|
Minimum shareholding requirement
In order to further align to shareholder expectations and best practice, the executive committee is required to hold a minimum of one times their TCTC/base salary in vested shares. This will be applicable from FY2021 and such shareholding must be achieved within three years from the introduction of the policy (FY2024).
Executive directors’ service contracts comply with terms and conditions of employment in South Africa. Top executives’ contracts do not contain guaranteed payments on termination.
Details of the date of appointment and relevant notice period for executive directors and prescribed officers are set out in the table below:
Brand de Villiers
|Date of appointment||08/11/1999||01/03/2007||01/11/2018||01/12/2015|
|Notice period||12 months||6 months||6 months||6 months|
|Restraint period||12 months||12 months||6 months||6 months|
On the appointment of a new executive director, his/her package will typically be in line with the principles as outlined above. To facilitate recruitment, it may be necessary to ‘buy out’ remuneration forfeited on joining the company. This will be considered on a case-by-case basis and may comprise cash or shares.
Payments in lieu of notice may be made to executive directors for the unexpired portion of the notice period. Such payments may be phased. On cessation, there is no automatic entitlement to an annual performance-related incentive (bonus), however, the committee retains the discretion to award a bonus to a leaver during the financial year taking into account the circumstances of his/her departure.
Non-executive director fees
Non-executive directors’ terms of appointment
The board has clear procedures for appointing and orientating directors. The nomination committee periodically assesses the skills represented on the board and determines whether these meet the company’s needs. Annual self-evaluations are completed by the board and its committees. Directors are invited to give their input in identifying potential candidates. Members of the nomination committee propose suitable candidates for consideration by the board. A fit-and-proper evaluation is performed for each candidate. Non-executive directors stand for re-election every three years.
Retirement and re-election of non-executive directors
All non-executive directors are subject to retirement and re-election by shareholders every three years. Additionally, non-executive directors are subject to election by shareholders at the first suitable opportunity for interim appointments. The names of non-executive directors submitted for election or re-election are accompanied by brief biographical details to enable shareholders to make an informed decision on their election. The reappointment of non-executive directors is not automatic.
Setting non-executive directors’ fees
The fee structure for non-executive directors has been designed to ensure we attract, retain and appropriately compensate a diverse and experienced board of non-executive directors.
Non-executive directors receive an annual fee as opposed to a fee per meeting, which recognises their ongoing responsibility for efficient control of the company. Remuneration is reviewed annually and is not linked to the company’s share price or performance. Non-executive directors do not qualify for share allocations under the group’s incentive schemes.
A comprehensive benchmarking exercise is performed by Axio Consultants which is tabled for consideration by the remuneration committee and the board to ascertain what the proposed directors’ and committees’ fees for FY2019 and FY2020 should be. The proposed fees are set out in the AGM resolution.
Non-binding advisory vote on remuneration policy
The remuneration policy, as set out in Part 2, will be subject to a non-binding advisory vote by shareholders at the AGM on 29 August 2019.
PART 3: IMPLEMENTATION REPORT
This section explains how the remuneration policy was implemented in the reporting year, and the resulting payments each of the members of executive management received (backward looking). All decisions in relation to executive remuneration have been made in line with our remuneration policy for this financial year.
Guaranteed pay (TCTC/base salary) adjustments
It is our philosophy to differentiate pay based on size of the job, market scarcity, and the performance of the employee. Ongoing market benchmarking is undertaken at all levels, using reputable salary surveys, and our pay is therefore measured against each respective level and function in the market.
During the year, levels of TCTC and base salary continued to vary across the jurisdictions where we operate. In determining any increases for executive directors and prescribed officers we considered personal performance, business performance and local economic indicators, overall movement in the local (and, where appropriate, regional and global) labour market, and levels observed across the wider workforce.
During FY2019, group companies made contributions for executive directors to the appropriate pension schemes. These contributions are in line with market norms and constitute a modest portion of the individuals’ total remuneration.
Below we show the remuneration package of the executive directors and prescribed officers for FY2020 as approved by the remuneration committee in June 2019.
|Imtiaz Patel||Calvo Mawela||Tim Jacobs||Brand de Villiers|
|Guaranteed pay||620||0||6 750||12.5(2)||5 803||5.5||620||0|
|(1)||Imtiaz Patel and Brand de Villiers are paid in US dollar which is aligned with MCG Dubai-based contracts and takes into account Dubai cost of living etc.|
|(2)||Calvo Mawela’s increase is above inflation to align with his new role as MCG CEO.|
FY2019 short-term incentive outcomes
The FY2019 targets for executive directors and prescribed officers are divided as follows:
In FY2019, the formula for calculating the bonus is set out as follows:
STI = TCTC/base salary x bonus % x performance % outcome
In the following tables we outline the actual STI outcomes for each financial performance measure relative to the target set at the beginning of the financial year:
|Group targets||Achieved/Not achieved|
|Achieve equated subscriber growth (DTT and DTH)|
|Achieve net subscriber growth (RSA and RoA)|
|Achieve subscriber growth (OTT)|
The table below sets out the incentive bonus paid out relative to the TCTC/base salary of the executive director/prescribed officer:
|A||B||C||D||E = C + D||F =
A x B x E
(F + G) / A
|Executive director/ prescribed officer||FY2019
as a % of
|Imtiaz Patel (US$)||620||70||43.8||50||93.8||407||27||70.0|
|Calvo Mawela (R)||6 000||70||45||45||90||3 780||–||63.0|
|Tim Jacobs (R)||5 500||70||45||45||90||1 444(1)||556||36.4|
|Brand de Villiers (US$)||620||70||40||42.5||82.5||256||31||46.3|
|(1)||Tim Jacobs’s bonus was prorated for FY2019 based on joining date on 1 November 2018.|
FY2019 Long-term incentive vesting outcomes
The table below details the value of vested but unexercised and unvested share awards as at 31 March 2019:
|Name||Share plan||Offer date||Number
|Expiry date||Share price
|Fair value per
SARs as at
|Fair value per
SARs as at
SARs as at
|M I Patel||MultiChoice
|11 Jul 2013||19 885||117.35||11 Jul 2018||11 Jul 2023||77.19||–||–||0.00|
|15 Sep 2014||28 198||125.60||15 Sep 2018||15 Sep 2024||77.19||–||–||0.00|
|15 Sep 2015||82 276||113.19||15 Sep 2018||15 Sep 2025||77.19||–||–||0.00|
|15 Sep 2014||28 198||125.60||15 Sep 2019||15 Sep 2024||77.19||58.08||1 637 740||0.00|
|15 Sep 2015||82 276||113.19||15 Sep 2019||15 Sep 2025||77.19||46.75||3 846 403||0.00|
|01 Sep 2016||58 369||116.30||01 Sep 2019||01 Sep 2026||77.19||39.54||2 307 910||0.00|
|15 Sep 2015||82 276||113.19||15 Sep 2020||15 Sep 2025||77.19||51.69||4 252 846||0.00|
|01 Sep 2016||58 369||116.30||01 Sep 2020||01 Sep 2026||77.19||45.30||2 644 116||0.00|
|28 Jun 2017||67 996||94.39||28 Jun 2020||28 Jun 2027||77.19||35.73||2 429 497||0.00|
|01 Sep 2016||58 370||116.30||01 Sep 2021||01 Sep 2026||77.19||50.62||2 954 689||0.00|
|28 Jun 2017||67 996||94.39||28 Jun 021||28 Jun 2027||77.19||39.76||2 703 521||0.00|
|27 Jun 2018||119 527||77.19||27 Jun 2021||27 Jun 2028||77.19||29.48||3 523 656||0.00|
|28 Jun 2017||67 996||94.39||28 Jun 2022||28 Jun 2027||77.19||43.51||2 958 506||0.00|
|27 Jun 2018||119 527||77.19||27 Jun 2022||27 Jun 2028||77.19||32.92||3 934 829||0.00|
|27 Jun 2018||119 529||77.19||27 Jun 2023||27 Jun 2028||77.19||36.00||4 303 044||0.00|
|1 060 788||0.00|
|18 Sep 2015||2 222||18.00||18 Sep 2018||18 Sep 2025||18.00||–||–||0.00|
|18 Sep 2015||2 222||18.00||18 Sep 2019||18 Sep 2025||18.00||9.83||21 842||0.00|
|18 Sep 2015||2 223||18.00||18 Sep 2019||18 Sep 2025||18.00||10.28||22 852||0.00|
|C P Mawela||MultiChoice
|12 Sep 2013||5 871||117.35||12 Sep 2018||12 Sep 2023||77.19||–||–||0.00|
|15 Sep 2014||5 087||125.60||15 Sep 2018||15 Sep 2024||77.19||–||–||0.00|
|15 Sep 2015||16 240||113.19||15 Sep 2018||15 Sep 2025||77.19||–||–||0.00|
|15 Sep 2014||5 087||125.60||15 Sep 2019||15 Sep 2024||77.19||58.08||295 453||0.00|
|15 Sep 2015||16 240||113.19||15 Sep 2019||15 Sep 2025||77.19||46.75||759 220||0.00|
|01 Sep 2016||13 958||116.30||01 Sep 2019||01 Sep 2026||77.19||39.54||551 899||0.00|
|15 Sep 2015||16 242||113.19||15 Sep 2020||15 Sep 2025||77.19||51.69||839 549||0.00|
|01 Sep 2016||13 958||116.30||01 Sep 2020||01 Sep 2026||77.19||45.30||632 297||0.00|
|28 Jun 2017||10 594||94.39||28 Jun 2020||28 Jun 2027||77.19||35.73||378 524||0.00|
|01 Sep 2016||13 958||116.30||01 Sep 2021||01 Sep 2026||77.19||50.62||706 554||0.00|
|28 Jun 2017||10 594||94.39||28 Jun 2021||28 Jun 2027||77.19||39.76||421 217||0.00|
|27 Jun 2018||26 119||77.19||27 Jun 2021||27 Jun 2028||77.19||29.48||769 988||0.00|
|28 Jun 2017||10 595||94.39||28 Jun 2022||28 Jun 2027||77.19||43.51||460 988||0.00|
|27 Jun 2018||26 119||77.19||27 Jun 2022||27 Jun 2028||77.19||32.92||859 837||0.00|
|27 Jun 2018||26 119||77.19||27 Jun 2023||27 Jun 2028||77.19||36.00||940 284||0.00|
|T N Jacobs||MultiChoice
|03 Dec 2018||151 142||77.19||03 Dec 2021||03 Dec 2028||77.19||30.37||4 590 183||0.00|
|03 Dec 2018||151 142||77.19||03 Dec 2022||03 Dec 2028||77.19||33.97||5 134 294||0.00|
|03 Dec 2018||151 143||77.19||03 Dec 2023||03 Dec 2028||77.19||37.27||5 633 100||0.00|
|B de Villiers(2)||MultiChoice
|27 Jun 2016||81 471||116.3||27 Jun 2019||27 Jun 2026||77.19||13.07||1 064 826||0.00|
|01 Sep 2016||2 866||116.3||01 Sep 2019||01 Sep 2026||77.19||39.54||113 322||0.00|
|27 Jun 2016||81 471||116.3||27 Jun 2020||27 Jun 2026||77.19||13.40||1 091 711||0.00|
|01 Sep 2016||2 866||116.3||01 Sep 2020||01 Sep 2026||77.19||45.30||129 830||0.00|
|28 Jun 2017||14 125||94.39||28 Jun 2020||28 Jun 2027||77.19||35.73||504 686||0.00|
|01 Sep 2016||2 866||116.3||01 Sep 2021||01 Sep 2026||77.19||50.62||145 077||0.00|
|27 Jun 2016||81 473||116.3||27 Jun 2021||27 Jun 2026||77.19||14.85||1 209 874||0.00|
|28 Jun 2017||14 125||94.39||28 Jun 2021||28 Jun 2027||77.19||39.76||561 610||0.00|
|27 Jun 2018||21 591||77.19||27 Jun 2021||27 Jun 2028||77.19||29.48||636 503||0.00|
|28 Jun 2017||14 127||94.39||28 Jun 2022||28 Jun 2027||77.19||43.51||614 666||0.00|
|27 Jun 2018||21 591||77.19||27 Jun 2022||27 Jun 2028||77.19||32.92||710 776||0.00|
|27 Jun 2018||21 593||77.19||27 Jun 2023||27 Jun 2028||77.19||36.00||777 348||0.00|
|(1)||For awards vested in 2018, the intrinsic values of the 2018 awards are reflected in the table and not the fair values.|
|(2)||Brand de Villiers exercised his Naspers options after 31 March 2019 which are detailed below.|
Executive director and prescribed officer single figure remuneration for FY2019
|(1)||Includes officer’s fees as a prescribed officer of MultiChoice South Africa.|
|(2)||Benefits exclude pension and includes all benefits not included in TCTC/base salary such as medical benefits, fringe benefits, family benefits, travel, long-service and disability benefits.|
|(3)||The STI reflects the bonus paid based on the performance of the relevant financial year (FY2019).|
|(4)||Tim Jacobs received a sign-on bonus of R3.81m on joining with a 12-month retention period.|
|(5)||The LTI value reflects the intrinsic value of MultiChoice share awards vesting in FY2020. The values of Naspers share awards vested in FY2019 are detailed below.|
Treatment of Naspers options
While MCG was part of the Naspers group, senior employees participated in the Naspers option share schemes (MIH Holdings Share Trust and MIH Services FZ LLC Share Trust). Following the unbundling, the vesting dates for the Naspers option awards were accelerated in line with the rules to the date of the MCG listing on 27 February 2019. The table below details the gain/ profit of these Naspers options based on the closing Naspers share price of R3 017 on 27 February 2019:
|Executive director/Prescribed officer||Number of
|Imtiaz Patel||25 922||14 584|
|Calvo Mawela||4 766||2 479|
|Brand de Villiers(2)||11 730||4 899|
|(1)||Tim Jacobs did not receive Naspers options.|
|(2)||Brand de Villiers exercised his Naspers options after 31 March 2019.|
Long-term incentives to be awarded during the next reporting year
|Executive director/Prescribed officer||Award
(as a multiple
|Brand de Villiers||2.2|
Non-executive directors’ fees
The fees paid to non-executive directors by the company are set out below.
|Directors’ remuneration||Directors’ fees||Committee and trustee
|D G Eriksson||–||–||0.18||3.81||0.11||4.25||8.35|
|F L N Letele(4)||–||11.52||–||–||–||–||11.52|
|K D Moroka||–||–||0.18||0.71||0.18||0.52||1.59|
|S J Z Pacak||–||–||0.18||4.11||0.29||0.63||5.21|
|J J Volkwyn(5)||–||2.64||–||–||–||–||2.64|
|(1)||Includes fees paid by Naspers for 11 months for Don Eriksson and Steve Pacak relating to Naspers board services.|
|(2)||Committee fees include fees for the attendance of the audit committee, risk committee, human resources and remuneration committee, the nomination committee and the social and ethics committee meetings of the board. Other fees relate to payments for other services to the group.|
|(3)||Trustee fees include fees for the attendance of the various retirement fund trustee meetings of the group’s retirement funds. An additional fee may be paid to directors for work done as directors with specific expertise.|
|(4)||Remunerated as an employee of the MultiChoice South Africa group.|
|(5)||Remunerated as an employee of MultiChoice Africa Services B.V.|
No termination payments were made to executive and non-executive directors on termination of employment or office in FY2019.
Adv K D Moroka
The consultancy agreement entered into between the company and Kgomotso Moroka, whereby Adv Moroka provides professional advisory services to the company and its subsidiaries, is considered immaterial to the wealth of Kgomotso and the board has, after consideration on a balanced and substance over form basis, determined that the agreement does not affect her categorisation as an independent non-executive director.
The consultancy services agreement was renewed for 12 months effective April 2019. This is to provide consultancy services to MultiChoice Group.
Mr J J Volkwyn
The consultancy services agreement was renewed with Jim Volkwyn for 12 months effective April 2019. This is to provide consultancy services to MultiChoice Group.
Mr M I A Patel
The company has entered into a three-year restraint of trade agreement with Imtiaz Patel which becomes effective on him stepping down as executive chair.
There were no deviations from the remuneration policy in FY2019.
Directors’ interest in MCG shares
The directors of MultiChoice Group Limited (and their associates) had the following beneficial interest in MultiChoice Group Limited ordinary shares at 31 March 2019:
|MultiChoice Group Limited – ordinary shares||Direct||Indirect||Total|
|M I Patel||1 412||–||1 412|
|F L N Letele||737||–||737|
|K D Moroka||290||–||290|
|S J Z Pacak||376 635||291 548||668 183|
|J J Volkwyn||15 000||10 910||25 910|
|T N Jacobs||2 731||–||2 731|
|Total||396 805||302 458||699 263|
All ordinary shares were obtained as part of the unbundling process from Naspers Limited.
Non-binding advisory vote on implementation report
The implementation report, as set out in Part 3, will be subject to a non-binding advisory vote by shareholders at the AGM on 29 August 2019.