Soft gold price hits Sibanye executives

By Dineo Faku Time of article published Apr 4, 2018

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JOHANNESBURG - Sibanye-Stillwater paid a total of R119million in cash remuneration for its executives in the year to December 2017 following the revision of its remuneration policies, a lower gold price and changes to its key performance indicators (KPIs).

The company said it had paid R39.9m cash remuneration to chief executive Neal Froneman, while chief financial officer Charl Keyter received R16.9m in the year to December 2017.

The cash remuneration included shares from the three-year long-term incentive scheme, salaries and cash bonuses for meeting KPIs.

The company paid R200m cash remuneration for executives in 2016.

James Wellsted, the Sibanye spokesperson, said compared with 2017, the group had benefited from the firmer gold price in 2016, which helped the share price to gain momentum. “For example, the gold price was good in 2016, which helped the share price. The company also benefited from the weaker rand following the (then) axing of Finance Minister Nhlanhla Nene, as well as the announcement of Brexit,” said Wellsted.

As part of the changes, the revised KPIs for South African gold and platinum assets production and operating costs weighed 30percent each while safety weighed 25percent and sustainability 15percent.

Stillwater has transformed from a gold company focused on gold mines in South Africa into the world’s second-biggest platinum and palladium producer. The changes prompted the revision of group remuneration policies to accommodate employment across the two continents.

“With due consideration of the significant organisational changes, the Remuneration Committee, supported by independent advice from an external consultant, PricewaterhouseCoopers, reviewed the market parity of executive remuneration against an updated benchmark group of peer companies to ensure appropriate remuneration of executive directors and group executive committee members,” said the company.

Following investors’ concerns, it also amended the vesting of conditional shares as of March 2016.

“The proportion of shares awarded that vest now depends on the extent to which Sibanye-Stillwater has performed over the intervening three-year period relative to two performance criteria - total shareholder return and return on capital employed,” the company said.

The company also said certain changes had been made to the reporting practice for executive remuneration in the interests of improved clarity and transparency and to align with the expected protocols under King IV.

As part of an acquisition spree, Sibanye hopes to take over Lonmin, the world’s third platinum producer for R5.1billion and has said the deal would add a commercially attractive smelting and refining business for the group.

Sibanye also bought Stillwater, the US-based platinum producer last year, and has previously taken took over Aquarius Platinum and Anglo American Platinum’s Rustenburg operations.

Anglo American Platinum (Amplats), paid its executive directors and prescribed officers R139m remuneration last year after recording a solid production performance and cutting net debt, according to the 2017 integrated annual report released last month.

The total remuneration package of Amplats chief executive Chris Griffith climbed to R32m, from R23.8m in 2016.


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