LENMED AIR 2019.pdf

REMUNERATION AND NOMINATIONS COMMITTEE REPORT Background statement This year, the key factors that affected remuneration were Group performance and the weak economy. As a result, the average salary increase across the Group from management to general staff was 6%. The voting results at the previous AGM held on 20 September 2018 on the Remuneration Policy and the Implementation Report were over 98% favourable. Remco took the results into account and did not consider it necessary to engage shareholders on the matter. In making its decision, Remco also took into account that Lenmed is managed by the major shareholder. Key areas of focus and key decisions taken by the Remuneration Committee (Remco) during the reporting period are to be found under the Remuneration Governance section below. There were no substantial changes to the Remuneration Policy. Remuneration consultants are engaged every two years to conduct benchmarking exercises on key roles within Lenmed. Remco engaged Century 21 consultants to conduct a salary benchmarking exercise in 2018 and this guided salary increases in the previous year. Management were awarded average increases of 6% for the FY2020 year, in line with increases across the group. Remco is satisfied that it was independent and objective in awarding these increases. The Remuneration Committee (Remco) addressed fewer changes over the past year, in addition to its regular activities of bedding down its policies and procedures and aiming for consistent standards across the Group. Of note was the implementation of the Senior Leadership Development Programme, a focus on King IV™ and succession planning at the Hospital Manager level. Our concern around the recruitment of scarce healthcare skills and cost containment still remains a focus area. Remco is satisfied that the Remuneration Policy achieved its stated objectives for the year. Board governance + The Chairman of the Board is Prakash Devchand. The Board acknowledges that the Devchand family shareholding in Lenmed prevents the Chairman from being independent. As such, the Board has appointed Mike Meehan as the Lead Independent Director. Mike’s role as Lead Independent is to, among others: – Lead in the absence of the chair; – Serve as a sounding board for the chair; – Act as an intermediary as between the chair and other Board members, if necessary; + Deal with shareholder concerns where contact through normal channels has failed to resolve concerns, or where such contact is inappropriate; + To strengthen independence on the Board; + To chair discussions and decision making by the Board on matters where the chair has a conflict of interest; and + To lead the performance appraisal of the chair. Remuneration governance Remco is now in its eighth full year of operation and has an established forward plan of agenda items. In addition, as the Group grows and seeks to implement further employee benefits, these are tabled, debated and approved on an ongoing basis. Remco is chaired by Bharti Harie, with the other permanent members being Mike Meehan (Lead Independent, non-executive) and Prof Bashkar Goolab (non-executive). Prakash Devchand (CEO); Vaughan Firman (CFO), Nilesh Patel (CMO); Amil Devchand (Deputy CEO); Bhavani Jeena (HR Manager) and the Financial Advisor from Grindrod Bank, Dino Theodorou, are also invited to attend the meetings. The committee chose to reduce the number of meetings for the year from four to three. It considered this to be more efficient and cost effective to do so. As a result, agenda items from the fourth meeting have now been combined into the third meeting. All three of the meetings were held prior to year end and all of the permanent members and management attended these meetings. Meetings were held on 22 May and 24 July 2018, and on 25 February 2019. Remco operates within a Terms of Reference, which was last approved by the Board on 30 May 2019. The Terms of Reference were benchmarked against King IV™, discussed and reviewed by Remco on 21 May 2019. On the whole Remco has fulfilled its responsibilities according to the Terms of Reference. For the year ahead, the following items will be added to the year plan: 1. Consideration and approval of the Company Secretary’s fees; and 2. Annual review and approval of the Human Resources Policy. Remco’s main purpose is to provide an independent and objective body that will: + Make recommendations on the remuneration policies, practices andphilosophies forthe executive directors, seniormanagement at Lenmed and its subsidiaries in general. + Make recommendations on the composition of the Board and Board committees and to ensure that the Board of Directors consists of individuals who are equipped to fulfil the role of directors of Lenmed. + Make recommendations on the nominations of new directors, having gone through the appropriate interview processes. + Review and report to the Board on its operating effectiveness and performance at least annually, by means of a self-evaluation questionnaire. Remco activities over the past financial year have included, among others: + Review of Exco service contracts for the CEO, CFO, CMO and COO and their respective letters of appointment. + Review of Board, Social and Ethics, Clinical Governance and Audit and Risk Committee membership. + Review of directors up for re-election at the AGM. 76 ENSURING AND PROTECTING VALUE