The background

A JSE-listed company required guidance in preparing its first annual remuneration report since its listing.

The objectives were to ensure that its Remuneration Policy and reporting practices adhered to the Companies Act 71 of 2008 (as amended), the JSE Listings Requirements, and the recommended practices of the King IV Report on Corporate Governance™ for South Africa, 2016, as well as to ensure that it met shareholder expectations. While compliance with minimum reporting standards was a key focus, the company also sought to enhance transparency and governance in executive remuneration. 

Process 

1. Initial Assessment and Scope Definition 

• Our Corporate Governance (CG) Reporting advisory team conducted a comprehensive assessment of the client’s existing remuneration practices and revealed gaps in governance, particularly in the discretionary distribution of executive bonuses and incentives by senior executive leadership—a practice increasingly challenged by regulators and shareholder activists. 
  
• The company lacked an independent Remuneration Policy, an indispensable aspect of remuneration governance and a foundational document in the remuneration report.  
  
• Having previously operated under the framework of a larger corporate group, the post-unbundling environment necessitated the development of a standalone remuneration policy tailored to the company’s strategic objectives and governance requirements. 

2. Policy Development Guidance 

• Our CG Reporting team developed a structured framework to guide the formulation of a new remuneration policy. This framework outlined principles for both fixed and variable pay, ensuring alignment between executive compensation, company performance, and shareholder value creation. 
  
• Using our internal database of corporate reporting metrics and proxy voting data, a benchmarking analysis was conducted, outlining minimum industry standards, Institutional Investor sentiment, and the positive and negative remuneration practices of JSE-listed peers.  
  
• The merits of various approaches to remuneration reporting were discussed with the client, and the feasibility of implementing various remuneration practices was determined internally by the client’s remuneration committee, with guidance from our team upon request. 

3. Drafting and Client Review 

• An initial draft of the remuneration report was developed, incorporating insights from these initial discussions and the industry benchmarking exercise. The drafting process was iterative, and each version was refined to enhance clarity, regulatory alignment, and adherence to King IV principles. 
  
• Daily client engagements provided structured feedback, which allowed adjustments and ensured the final remuneration report met both regulatory standards and internal governance expectations. 

4. Document Finalisation and Sign-Off 

• Collaboration between our CG Reporting and Design teams ensured that the remuneration report was comprehensive and visually engaging. to enhance readability, important data points were included using graphs and pull quotes. 
  
• The final remuneration report underwent rigorous content refinement, focusing on clarity, accuracy, and compliance with disclosure requirements. Following senior management review and approval, the report was prepared for presentation at the Annual General Meeting (AGM). 
  

Outcome 


While the final remuneration report incorporated some discretionary elements at the client’s request, it was structured to align closely with regulatory expectations and best practice principles.  

At the AGM, less than 5% of shareholders voted against the remuneration policy and Implementation Reports. Feedback from key stakeholders, however, indicated that further alignment with emerging governance trends would be beneficial in future. 

Conclusion 


This case study exemplifies Ince’s researched, structured, and collaborative approach to Remuneration reporting. Beyond achieving compliance, we enhanced the client’s understanding of effective Remuneration Governance.  

Internally, the lessons learned from this project have further refined our approach to remuneration consulting, particularly in balancing client preferences with evolving best practices. 

For more information regarding our CG Reporting advisory offering, contact Steven Engelsman at stevene@Ince.co.za