This report on remuneration
and related matters covers issues dealt with by the group
remuneration committee. Details of that committee are
contained in this report.
REMUNERATION PHILOSOPHY
The group’s remuneration philosophy, which is aligned
with its business strategy, is to attract, retain, motivate
and reward directors, senior executives and staff by the
payment of fair, competitive and appropriately structured
remuneration. Remuneration is reviewed at regular intervals
to achieve this.
EXECUTIVE DIRECTORS' REMUNERATION
The group uses independent remuneration consultants to
advise on the profiling and appropriate related remuneration
levels of executive directors and other senior executives,
relative to benchmarked surveys of comparative South African
employer groups. The group remuneration committee is satisfied
that fair remuneration practices are in place and that
the executive directors are being remunerated in line
with their responsibilities and performance and with the
market.
The remuneration packages of executive directors and other
senior executives include performance related remuneration
which is determined in terms of incentive schemes operated
at group and operating entity levels. These schemes have
been designed and implemented, with assistance from the
independent remuneration consultants, to competitively
reward those directors and executives who have contributed
to the group’s sustainable earnings growth and value
creation.
The remuneration of executive directors for the year ended
30 June 2002 is set out in table 1 below:
Table
1: Executive directors’ remuneration
– year ended 30 June 2002
(R000)
BC Bruce
AJ de Nysschen
RW Rees
KE Smith
KJ Grovι**
JS Stanbury***
Directors fees
49
49
49
49
33
12
Salary
1 539
941
1 056
767
412
Retirement fund contributions
206
129
179
106
53
Allowances
4
95
5
183
94
Other benefits
110
35
80
17
1 615
Total guaranteed remuneration
1 908
1 249
1 369
1 122
33
2 186
Gain on exercise of share
options
294
622
429
Performance related*
1 600
335
1 125
1 000
TOTAL
3
802
2
206
2
923
2
122
33
2
186
*
Performance bonuses are accounted for on an
accrual basis, to match the amount payable to the
applicable financial year end
**
Directors fees only – resigned February
2002
***
Terminated November 2001 – includes
termination payment
DIRECTORS'
SHARE OPTIONS
Share option allocations
are normally considered annually taking into account constraints
of appropriate remuneration multiples and an annual allocation
limit of approximately 0,5% of the company’s issued
capital. Resultant grants of options are offered in terms
of the rules of the group’s share incentive scheme
which was implemented to, inter alia, promote the retention
of key employees.
The options granted in 2001 and the current year were
split. A portion of the allocation was granted under the
standardconditions relating to the vesting of the options
which require only that the executive needs to be in the
employ of the group on the vesting dates in order for
the options to be exercisable. A second portion of the
allocation was granted with hurdle conditions that imposed
performance based vesting principles requiring the company’s
share price to increase by 25% per annum compounded from
the original allocation date in order for the options
to vest.
On 13 March 2002, a total of 790 000 share options were
granted to executive directors at an option price of 693
cents per share.
The movements in share options of directors during the
year ended 30 June 2002, are set out in table 2 below:
Table 2: Movements
in directors share options year ended 30 June
2002
Conditions
Outstanding
options at
30 June
2001
Granted
during
the year
Surrendered
during
the year
Exercised
during
the year
Exercise
date
Exercise
price
(cents)
Gain
(R000)
Outstanding
options at
20 June
2002
DC Brink *
Standard
1 960 000
1 960 000
BC Bruce
Standard
2 285 855
200 000
62 500
18/3/02
233
294
2 423 355
Hurdle
250 000
210 000
460 000
AJ de Nysschen
Standard
693 500
62 500
19/3/02
233
294
56 250
9/5/02
316
328
574 750
Hurdle
100 000
100 000
RW Rees
Standard
1 000 000
100 000
75 000
27/6/02
316
429
1 025 000
Hurdle
200 000
110 000
310 000
KE Smith
Standard
656 070
85 000
741 070
Hurdle
200 000
85 000
285 000
JS Stanbury
Standard
500 000
500 000
Hurdle
200 000
200 000
* Options granted
during service as an executive director
DIRECTORS' SERVICE
CONTRACTS
Directors do not have fixed-term contracts, but executive
directors are subject to notice periods of twelve months.
The retirement date of executive directors is at age 63
while non executive directors are required to retire at
age 70 unless decided otherwise by the Board in its sole
discretion.
NON
EXECUTIVE DIRECTORS' REMUNERATION
The level of fees for service as a director, additional
fees for service on board committees and the chairman’s
fee are reviewed annually.
The remuneration of non executive directors for the year
ended 30 June 2002 is set out in table 3 below:
Table 3:
(R000)
Directors
Committee
Chairmans
Fees
Fees
Fee
Total
DC Brink
49
46
200
295
BN Bam
49
49
WP Esterhuyse
49
42
91
SE Funde
49
49
PG Joubert
49
65
114
SJ Macozoma
49
49
AJ Morgan
49
18
67
AA Routledge
49
18
67
JJM van Zyl
49
18
67
Details of service on board committees
are set out on page 26 of this report.
The levels of non executive fees and committee fees have
been unchanged since 1 July 1999. The approval of shareholders
will be sought at the forthcoming annual general meeting
to change the basis and quantum of the non executive directors’
fees.
SHARE INCENTIVE
SCHEME
The Murray & Roberts Holdings Limited Employee Share
Incentive Scheme (“the Scheme”) was approved
by shareholders in October 1987 to operate through the
means of The Murray & Roberts Trust (“the Trust”).
At 30 June 2002, the Trust held 14 276 278 shares against
the commitment of options granted by the trust totalling
22 263 366 shares. It is expected that the shortfall will
be satisfied from options surrendered from time to time
and the purchase of shares by the Trust (including repurchases
from participants exercising options and simultaneously
disposing of the shares). If necessary, and at the board’s
discretion, the company could issue new shares within
the maximum of 10% of the company’s issued capital
which was authorised by shareholders for this purpose.
The details of the movement in the outstanding options
granted by the Trust during the year ended
30 June 2002 are set out in table 4 on page 32.
Table
4: Movement in Outstanding Share Options year
ended 30 June 2002
Schemes
implemented on:
Outstanding
Options at
30 June
2001
Granted
during
the year
Surrendered
during
the year
Exercised
during
the year
Outstanding
options at
30 June
2002
Option price per share
(cents)
10 July 1992
383 417
(29 261)
354 156
940
23 June 1993
372 286
(12 605)
359 681
980
30 June 1994
275 234
(20 564)
254 670
1 870
29 June 1995
228 715
(7 062)
221 653
2 150
27 June 1996
388 400
(17 500)
370 900
1 720
07 July 1997
620 921
(39 905)
(1 000)
580 016
913
06 January 1998
1 000 000
1 000 000
770
09 March 1998
2 143 890
(130 500)
(43 500)
1 969 890
805
17 March 1999
9 864 843
(249 000)
(2 364643)
7 251 200
233
25 August 1999
99 000
99 000
440
08 May 2000
3 987 500
(472 900)
(358 500)
3 156 100
316
15 June 2000
1 150 000
(75 000)
1 075 000
316
29 August 2000
1 000 000
1 000 000
325
14 March 2001
Standard
2 535 000
(800 000)
1 735 000
460
14 March 2001
Hurdle
1 430 000
(430 000)
1 000 000
460
09 October 2001
20 000
20 000
700
13 March 2002
Standard
976 500
976 500
693
13 March 2002
Hurdle
839 500
839 500
693
TOTALS
25 479 206
1 836 000
(2 209 297)
(2 842 643)
22 263 266
Notes:
1.
For the 1998
and prior schemes, the options vest as to 50% at
the fourth and 100% at the fifth anniversary of
the grant.
2.
For the 1999 and later schemes,
the options vest at 25% per annum in each of the
second to fifth anniversaries of the grant.
3.
Each of the schemes terminate
on the tenth anniversary of the grant and any unexercised
options expire at that date.
