Please be warned, only read further if you have a strong stomach.
http://www.businessreport.co.za/index.php?fArticleId=2573803 also check http://www.kaelosa.com/backend/CONTENT/view.asp?ID=1653514 for details on jackpot payouts
Executive pay
The science behind awarding top packages
June 22, 2005
By Renee Bonorchis and Ann Crotty
Johannesburg - The generously rewarded executives who run our major listed companies owe a huge debt of gratitude to the remuneration committees that recommended their packages and also to the institutional shareholders that made the awarding of these packages possible.
Since the disclosure of executive remuneration packages became obligatory in 2001, not only has the size of those packages ballooned, but companies have gone to great lengths to demonstrate that the size and design of those packages is the result of a vigorous analytical process.
The remuneration section of an annual report can run to several pages and will generally include a description of the group's remuneration philosophy, the members of the remuneration committee, the remuneration structure and the various incentives included in the remuneration packages.
Despite this supposedly vigorous process, any outsider such as a shareholder or the media attempting to establish even a rough approximation of the sums involved, is faced with huge challenges.
Please check the link provided for more information...
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THANKS A MILLION GUYS (from left) Roddy Sparks, the managing director of Old Mutual, Johan van Zyl, the chief executive of Sanlam, and Brian Molefe, the chief executive of the PIC PHOTO JOHN •AOOOROOF
Key and Methodology The companies in the table are displayed alphabetically.
* - There is a footnote on this company
A - The company is inducted on the JSE Securities Exchange`s Socially Responsible Investment index
PIC = The Public Investment Corporation, the government pension fund management company
Omam = Old Mutual Asset Managers
RMBH = Rand Merchant Bank Holdings OM = Old Mutual
All data was gathered from the latest available annual reports as at June 17 2005.
AD currency conversions were done at R6 to the dollar and R12 to the pound for ease of comparison.
Executives with options from overseas listings have had all amounts reduced to rand and JSE terms, which might not always accurately display their net worth.
The package, which is the last recorded annual pay (or a director, in some instances includes gains made on the exercise and sale of options.
Although some companies have more than one share incentive scheme, all options available to a director now or in the future were amalgamated.
The otter value of the options is the price that the executive would have to pay the company in order to exercise the options (or take up the offer).
The share prices used to work out market values were, in most instances, the JSE closing price on Friday June 3.
16 calculate the market value of the options, we multiplied the number of options on offer by the share price.
To calculate the potential profit, we took the market value and subtracted the offer value of the options. This method is crude at best and does not account tor the (act that options vest over various periods of time.
The majority or fhe directors shown above already hold shares in their companies. Sometimes these shares are a result of the director being a founder of the company, sometimes they are due to options having been exercised in the past, sometimes both. We took the broad view that shares were about wealth and excluded their value from our calculations.
Absa was excluded From this research because its last annual report is very out of date as it predates the departure of Nallie Bosman and t
advent of the Barclays offer, j
Footnotes Anglo American - Coins on the longterm incentive plan were added to Tony Trahar`s package.
This company has the most complicated options schemes. All options on offer to Trahar were added and their values worked out. Anglo American Platinum - This company, like others in the Anglo stable, has an executive share appreciation scheme, a long-term incentive plan, a deterred bonus plan and an executive share option scheme. This makes it very hard to work out all of what is owed to whom. Some directors benefit from the same types of schemes from Anglo American.
Ralph Havenstein was also awarded a long-term option to take up another 26 296 shares. These shares don`t have an offer value in the annual report, but their current market value would be about R7.63 million. Dimension Data - Jeremy Ord has 5.2 million rand-based options that were all offered in 1998 and 1999 at a minimum of R22. They are all out of the money. In the past financial year he was granted an extra 750 000 poundbased options, taking the number of these options to 2.45 million.
The share price used was the London dosing price on Thursday, June 9. JD Group - David Sussman`s R14.5 million package includes R9.2 million in gains from options. He also sits on the remuneration committee. Massmart - Mark Lamberti`s package includes a R31.5 million gain on options exercised. Mittd Steel SA - The remuneration committee was made up of just two directors: Khotso Mokheie and Aditya Mittal.....
Article shortened due word limit. Please go to http://www.kaelosa.com/backend/CONTENT/view.asp?ID=1653514 for further reading.
http://www.businessreport.co.za/index.php?fArticleId=2573803 also check http://www.kaelosa.com/backend/CONTENT/view.asp?ID=1653514 for details on jackpot payouts
Executive pay
The science behind awarding top packages
June 22, 2005
By Renee Bonorchis and Ann Crotty
Johannesburg - The generously rewarded executives who run our major listed companies owe a huge debt of gratitude to the remuneration committees that recommended their packages and also to the institutional shareholders that made the awarding of these packages possible.
Since the disclosure of executive remuneration packages became obligatory in 2001, not only has the size of those packages ballooned, but companies have gone to great lengths to demonstrate that the size and design of those packages is the result of a vigorous analytical process.
The remuneration section of an annual report can run to several pages and will generally include a description of the group's remuneration philosophy, the members of the remuneration committee, the remuneration structure and the various incentives included in the remuneration packages.
Despite this supposedly vigorous process, any outsider such as a shareholder or the media attempting to establish even a rough approximation of the sums involved, is faced with huge challenges.
Please check the link provided for more information...
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=--=-=-=-=-=--=-=-=-=-=--=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
THANKS A MILLION GUYS (from left) Roddy Sparks, the managing director of Old Mutual, Johan van Zyl, the chief executive of Sanlam, and Brian Molefe, the chief executive of the PIC PHOTO JOHN •AOOOROOF
Key and Methodology The companies in the table are displayed alphabetically.
* - There is a footnote on this company
A - The company is inducted on the JSE Securities Exchange`s Socially Responsible Investment index
PIC = The Public Investment Corporation, the government pension fund management company
Omam = Old Mutual Asset Managers
RMBH = Rand Merchant Bank Holdings OM = Old Mutual
All data was gathered from the latest available annual reports as at June 17 2005.
AD currency conversions were done at R6 to the dollar and R12 to the pound for ease of comparison.
Executives with options from overseas listings have had all amounts reduced to rand and JSE terms, which might not always accurately display their net worth.
The package, which is the last recorded annual pay (or a director, in some instances includes gains made on the exercise and sale of options.
Although some companies have more than one share incentive scheme, all options available to a director now or in the future were amalgamated.
The otter value of the options is the price that the executive would have to pay the company in order to exercise the options (or take up the offer).
The share prices used to work out market values were, in most instances, the JSE closing price on Friday June 3.
16 calculate the market value of the options, we multiplied the number of options on offer by the share price.
To calculate the potential profit, we took the market value and subtracted the offer value of the options. This method is crude at best and does not account tor the (act that options vest over various periods of time.
The majority or fhe directors shown above already hold shares in their companies. Sometimes these shares are a result of the director being a founder of the company, sometimes they are due to options having been exercised in the past, sometimes both. We took the broad view that shares were about wealth and excluded their value from our calculations.
Absa was excluded From this research because its last annual report is very out of date as it predates the departure of Nallie Bosman and t
advent of the Barclays offer, j
Footnotes Anglo American - Coins on the longterm incentive plan were added to Tony Trahar`s package.
This company has the most complicated options schemes. All options on offer to Trahar were added and their values worked out. Anglo American Platinum - This company, like others in the Anglo stable, has an executive share appreciation scheme, a long-term incentive plan, a deterred bonus plan and an executive share option scheme. This makes it very hard to work out all of what is owed to whom. Some directors benefit from the same types of schemes from Anglo American.
Ralph Havenstein was also awarded a long-term option to take up another 26 296 shares. These shares don`t have an offer value in the annual report, but their current market value would be about R7.63 million. Dimension Data - Jeremy Ord has 5.2 million rand-based options that were all offered in 1998 and 1999 at a minimum of R22. They are all out of the money. In the past financial year he was granted an extra 750 000 poundbased options, taking the number of these options to 2.45 million.
The share price used was the London dosing price on Thursday, June 9. JD Group - David Sussman`s R14.5 million package includes R9.2 million in gains from options. He also sits on the remuneration committee. Massmart - Mark Lamberti`s package includes a R31.5 million gain on options exercised. Mittd Steel SA - The remuneration committee was made up of just two directors: Khotso Mokheie and Aditya Mittal.....
Article shortened due word limit. Please go to http://www.kaelosa.com/backend/CONTENT/view.asp?ID=1653514 for further reading.
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