RAND WATER ANNUAL REPORT 2023

Consolidated Annual Financial Statements for the year ended 30 June 2023

Remuneration Report Remuneration Policy

The Human Resources and Remuneration Committee (REMCO) is delegated to oversee remuneration in the Group as set out in the Terms of Reference and the Delegation of Authority Framework. REMCO recommends to the Board on executive remuneration and conditions of service. Rand Water’s remuneration policy and programmes enable the organisation to recruit, retain and motivate the talent that it needs to achieve and exceed organisational objectives within the context of equity and an environment that reinforces the reward of excellent performance. The remuneration methodology provides for cost effectiveness whereby employees are paid at the rate that is commensurate with their outputs and worth of jobs to the organisation. The remuneration philosophy is based on the principles of internal equity, external competitiveness, compliance to legislation and adherence to the Rand Water values. Rand Water must remunerate employees at fair market value and must receive the commensurate value for the organisation. • Remuneration practices are fair, market relates and are aligned to with the business strategy, vision and values, • Remuneration that recognises individual contribution based on the span of control, role, scope and responsibility, • Performance link to pay and efficient administration. Cognisance is taken of the external environment and to this end remuneration practices in respect of salaries, benefits, conditions of employment and variable pay are benchmarked against the external market periodically to assess Rand Water’s alignment to the market. This benchmarking process is important as this is where Rand Water draws some of it’s skills from, and, where it loses some of it’s skills to. The key principles are:

Variable pay

Rand Water operates a Short-Term Incentive Scheme which is predicated on the achievement of predetermined operational, technical, social and financial performance measures and these are contained in the Corporate Scorecard which is approved by the Board. The Scheme is selffunding and any pay-outs contemplated are at the discretion of the relevant governance structures.

Performance measures are articulated in the Corporate, Business Unit, Divisional, Departmental and individual scorecards and the purpose of the scheme is to drive the achievement of the set performance objectives of the organisation.

Any payouts are implemented after all internal and external assurance processes have been concluded, and approvals from relevant Governance Structures is obtained. For the 2021/2022 financial year, a Short‑Term Incentive was paid to eligible employees in December 2022. The remuneration structure at an Executive level is a Total Cost to Company, and the executives may elect to participate in the Rand Water Group Schemes. Employees at a management levels are remunerated on a flexible Total Cost to Company structure where participation in the Group Schemes is a condition of employment, therefore, compulsory. Management level employees may structure their packages within set parameters. The Bargaining Unit employees are remunerated on a “basic plus add‑on” basis and annual increases are determined though collective bargaining.

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