LENMED AIR 2019.pdf

+ Review of director independence and a discussion around the factors determining independence and number of years on the Board. + Approval of the Executive Annual Bonus Scheme for the financial year ending February 2020. Adjustments made to individual targets are discussed under the section Risk portion of package. + Approval of the Executive Annual Bonus payments for the financial year ended February 2019. + Approval of the Executive Annual Remuneration increases effective 1 March 2019. + Oversight and discussion of the Hospital Managers’ and Group functional heads’ annual remuneration increases effective 1 March 2019. + Review of non-executive director fees. Please refer to the section marked Remuneration Policy below for a breakdown of non-executive director fees. + Performance review of the Board and its sub-committees. Going forward, a discussion on the effectiveness of the Board and its sub-committees will be held annually at Board level, with questionnaires being completed every second year. This should encourage a more open and robust discussion. The Chairman is also free to hold one-on-one discussions with Board members on an ad-hoc basis. + As per the previous year, a performance review of the Company Secretary was conducted by Board members. The outcome was satisfactory, and feedback was given to the Company Secretary. + Revision of the long service and share scheme awards. No revisions were affected in the current year. + Review and discussion around the Lenmed organogram. This assisted in the oversight of the appointment of various vacancies within the approved organogram and certain changes to the organogram based on the changes in the Lenmed business model. + Review and discussion of executive and senior management succession planning. + The Share Appreciations Rights Scheme (SARS) was reviewed with no major amendments made. As such, annual awards were made under the scheme. + Feedback from HR on a full review of staff members who are covered by medical aid (and how many remain without any cover), together with a review of the employer contribution to the scheme. + Director Training: This year the Board enjoyed a presentation on Disruptive Technologies. This proved very useful in getting the Board to understand international trends in healthcare and challenged us to craft a Lenmed strategy. As per the previous year, various industry specialists were invited to address the directors at the annual strategy planning meeting earlier this year. This year we were addressed by an industry analyst and an actuary. This provided valuable insight and context into the healthcare environment. + Review of staff pension fund and funeral arrangements. + Discussion around the recruitment of scarce healthcare (especially nursing) skills. The skills shortage is an ongoing challenge and more will be invested in training. This is an industry-wide challenge and not unique to the Group. Presently, Lenmed has all logistics in place to open a nursing college. We (as with other applicants) await the approval of our curriculum from the Department of Health. The situation is becoming dire as nurses are choosing not to specialise and advance their careers and experienced and specialist nursing staff are opting to emigrate, with no new inflow into the field. Remuneration Policy In the context of the South African healthcare sector, where there is a shortage of staff generally, and a dire need to retain talented and higher level staff, it is the task of Remco to recommend strategies to attract, motivate, reward and retain staff of the highest calibre, while still being mindful of managing costs. Remco considers the remuneration packages of its executive directors and Hospital Managers, based on current role/responsibilities, individual performance, and current market levels of similar job profiles. Lenmed’s remuneration philosophy is to pay a fair salary in exchange for fair work done. We believe that we pay a fair salary within industry norms and, where the business case demands, we are prepared to compete for scarce skills. Once in our employ, we extend the “We Do Care” policy to our staff, where we aim to retain and motivate staff using the various benefits discussed below. In doing so, we believe that we promote positive outcomes, and an ethical culture and responsible corporate citizenship. Lenmed’s policy on remuneration is that the guaranteed portion of our staff packages are targeted to be at least on the median, or slightly below the median. Conversely, as regards the “risk portion” of the package, our policy is that this should targeted to be equal to or higher than the median. Remco believes that this aims to promote the achievement of strategic objectives within Lenmed’s risk appetite. Remco believes that the remuneration policy addresses fair and responsible remuneration for management in the context of overall employee remuneration. Generally, Remco andmanagement are committed to ethical culture and responsible corporate citizenship. In its deliberations Remco has taken into account that management, relative to staff assume far greater responsibilities and accountability. Remco is cognisant of the wage gap as between management and staff and, having oversight of both management and staff salary increases, deliberates and challenges these gaps to ensure fair remuneration. For example, while management and senior staff enjoy short term incentive bonuses, general staff enjoy long service awards, not linked to any targets. In considering the Remuneration Policy, Remco confirms that none of the following benefits have been included in management employment contracts: + Any benefits on termination of office; + Any sign-on, retention or restraint benefits; + Any pre-vesting forfeiture (malus) or post-vesting forfeiture (claw-back) of remuneration; and + Any commissions or allowances. LENMED ANNUAL INTEGRATED REPORT 2019 77