Netcare’s chief executive, Richard Friedland, took home R8.94million annual salary and was paid R5.5m in a bonus to take his annual earnings to R14.44m in 2017. This is slightly up from the annual package of R14.29m he received last year.
The total package paid to its executives and prescribed officers was R34.72m in 2017, against R35.47m in 2016.
The drop in earnings for executives might be linked to lower profits reported for the year to end in September.
In the results, Netcare reported 9.6percent decline in revenue to R34.13billion, while normalised earnings before interest, tax, depreciation and amortisation declined 22.7percent to R4.27bn, excluding exceptional items, while normalised operating profit fell 28.1percent to R2.97bn, down from R4.13bn last year.
Normalised profit after taxation was down by 38.7percent to R1.78billion.
The group said the executive compensation was, therefore, measured in terms of financial and strategic delivery as well as non-financial objectives.
“Incentive programmes reward individual, team and group performance when the effort and output aligns to the group’s strategic priorities,” the group said.
However, it said macroeconomic factors affecting the industry and the country are considered when awarding annual salary increases and incentive payments.
The board and the remuneration committee said they were satisfied that the financial targets did not encourage an inappropriate level of risk-taking and that they supported sustainable value creation in the medium to long term.
“The remuneration policy also outlines the key principles for remunerating all other employees and these are aligned to best practice.”
Netcare said it drove a strong performance culture when it made the decision on how much it should pay its staff on an annual basis.
The annual report shows the group is trying to close the gap between the salary earned by its executives and lower levels of staff.
Increases awarded to senior executives were 2.5percent lower than those paid to lower levels of staff.
- BUSINESS REPORT