SOE Executive Management Performance and Remuneration Structure

SOE Executive Management Performance and Remuneration Structure

SA Express Performance Management

THE PERFORMANCE MODEL Business Objectives • Reward and recognition • STI and LTI • Managing Poor Performance • End of cycle formal review (Bi-annual) • Development Plans • • • Strategic Planning Objectives Targets Contract Development Plan • • Informal reviews (1 -on-1) Monitoring Performance Feedback Coaching Talent Management – Remuneration - Development

Performance Management Methodology ► Mechanism : Short-Term Incentive Scheme ► Measurable objectives : - SA Express uses the Balance Scorecard Performance Management System for all levels (including Executives) - The Performance Contracts are cascaded from the Corporate targets - Performance Bonuses are only payable if the Corporate targets are met : - Long-Term Incentive Scheme - Linked to retention - Is a rolling three year incentive scheme for all management (including critical skills at a staff level) - 90% of the STI is banked for 2 years for the individual - All Executives and Management who gained entry to the scheme must achieve and sustain performance SA Express measures the following 5 perspectives for a balanced approach to performance ► Finance Strategic Customer Business Process Learning and Development Processes : : : All scorecards are contracted once a year All reviews are done twice a year – In consultation with and on approval by the CEO Bonuses are only payable on approval by the board

SA Express Talent Management

Leadership and Talent management Framework (LTFMF) Jim Collins Steve Drotter Good to Great Leadership Pipe line Model na ge Strategic Intent a. B us 5 ine ss Executive 4 3 2 1 Effective Leader Competent Manager SST (Stratified Systems Theory) Strategic Execution ers ag an e. M g na Ma Tactical Management Ma Contributing Team Member na Highly Capable Individual e ag ge Ot he rs lf Se n Ma All global theories amount to similar outcomes… Optimisiing Systems Complexity / Work Levels Ma Elliot Jacques

Talent Management Succession Leadership Imperatives Strategic positions Talent Management Deployment of Talent Pools • Build Retention Strategies • Buy Identify - Assess - Accelerate Corporate Plan • Development • Reward and Recognition Leadership - Communication - Accountability - Skills Alignment - Measurement

Succession Planning Strategic Resourcing Identify SP jobs PAD SITUATIONAL ANALYSIS • Vision, mission, strategy • Future work demand predictions • Future incumbent supply predictions GAPS • Key focus areas, Business criteria, Demand vs Supply RESOURCING STRATEGY • Recruitment and Selection • Redeployment • Transfers • Designate positions • Succession planning Appoint successor to target job SP - Succession Plan Develop job profiles RESOURCING OBJECTIVES • Current occupied • to be maintained • to be eliminated • Current vacant • internal appointment • external appointment • New jobs to be created • internal appointment • external appointment Documentation / reporting Identify successors Develop successors

Leadership Development Levels of work Executive Development • Mentorship and Coaching Global Leadership Development Model • Business Schools (Short courses) • Global Exposure • Strategic conversations Workplace • Book Reviews Team SA Express MDP Individual Leadership Pipeline SA Express SDP

SA Express Structure Management

SA Express Board of Directors Top echelon Chief Executive Officer Company Secretary Chief Financial Officer Executive Manager Finance Executive Manager Safety, Security, QM and Environment General Manager Strategy and Market Development Regional General Manager African Expansion Executive Manager Legal Chief Information Officer Executive Manager Marketing and Customer Care General Manager Operations Executive Manager Airport Operations General Manager Commercial General Manager Human Resources General Manager Technical

Demographic Breakdown MALE FEMALE Race 2007 2008 2009 2010/03/12 Grand Total African White AFRICAN COLOURED WHITE 5 2 7 1 2 17 29. 41% 11. 76% 41. 18% 5. 88% 11. 76% 100. 00% 5 2 6 2 2 17 29. 41% 11. 76% 35. 29% 11. 76% 100. 00% 4 2 6 2 2 16 25. 00% 12. 50% 37. 50% 12. 50% 100. 00% 4 2 6 2 1 15 26. 67% 13. 33% 40. 00% 13. 33% 6. 67% 100. 00% • Total Executive Head Count of 15 as at 12 March 2010 • Race Profile = 20% white and 80% black • Gender profile = 40% female and 60% male. • Overall employment profile reflects very positively against national and industry benchmarks

Turnover at an Executive Level Year Positions Turnover Reason 2007 17 1 Resignation 2008 17 1 Resignation 2009 16 1 Retirement Turnover: 6% Average (Open/Close -1 *100) Status and filling of vacancies • Position requirements changed due to restructuring at an executive level • The SA Express CEO position will become vacant within the next month

SA Express Remuneration Management

Remuneration Philosophy + Short-term Incentive Guaranteed Package Base / Basic Salary Fixed Pay + Other Benefits + Cost of employee benefits SA Express Remuneration Philosophy Total Earnings / Total Cost to Company + Long-term Incentive Total Remuneration / Total Cost of Employment Variable Pay Market Benchmark

Executive Management Remuneration Framework SA Express broad band Level Transnet SAA Paterson SST 6 General and Executive Manager 106, 104 EM 3 / ES 3 E 1 / E 2 SE 1 5 Senior Manager 109 SM 2 / SS 2 D 3 / D 4 MP 2 / MP 3 4 Manager 110 MO 1 / SO 1 D 1 / D 2 SL / MP 1 Low Level Lower Guide Median Upper Guide High Lower Guide Median Upper Guide General Manager 1, 041, 576 1, 151, 196 1, 210, 222 1, 357, 761 1, 567, 157 1, 679, 908 Executive Manager 602, 392 759, 551 916, 856 750, 168 907, 474 1, 064, 632 • SA Express pays on the median as per its Remuneration Philosophy • SA Express adheres strictly to the DPE Remuneration guidelines for all Directors - Movement adjusted against CPI since publication - Board members are afforded industry travel concessions

Summary Performance Management ► SA Express Performance Management is well entrenched Talent Management ► The Talent Management Framework leads to a consistent supply of talented leaders : : : Build – Talented individuals are identified through the Performance Management System Buy – We recruit Talent from the Private and Public sector The succession plan has been in place since 2006 and reviewed annually Organisation Management ► SA Express experienced low staff turnover and managed to reduce the number of Execs through efficiencies : The long-term retention mechanisms proofs to be successful Remuneration Management ► SA Express adheres to the DPE guidelines for SOEs ► SA Express remains competitive against market demands ► SA Express is in line with market benchmarks and will continuously uphold its philosophy

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