REMUNERATION REPORT PART 1: LETTER FROM THE CHAIRMAN OF THE HUMAN CAPITAL COMMITTEE ( HCC ) TO THE SHAREHOLDERS

Transcription

1 REMUNERATION REPORT PART 1: LETTER FROM THE CHAIRMAN OF THE HUMAN CAPITAL COMMITTEE ( HCC ) TO THE SHAREHOLDERS It is with great pleasure that we present the remuneration report for the year ended 30 September This report complies with all applicable regulations and is materially aligned to King IV, read with the amended JSE Listings Requirements. Introduction The 2017 financial year was characterised by tough trading conditions and volume regression. Prits were further affected by the negative impact the well-communicated maize procurement decision. Consumer confidence remained muted, and JSE-listed companies were affected by the downgrade South Africa s credit rating. The International division came under particular strain, affected by multiple external factors. These include persistent negative weather conditions that affected raw material supply, as well as currency fluctuations, which had an adverse impact on the affordability Pioneer Foods products in export markets. Our effective, lowcost operating model stood us in good stead during this trying period. The outlook for 2018 is more positive. We have made slight changes to our strategic objectives to improve the Group s performance and mitigate ongoing operating risks going forward. More detail around our forward-looking business strategy is set out in the CEO s report on page 34, read together with the chairman s letter on page 32 the integrated report. There have been a number changes to the structure the Board, including the early retirement outgoing CEO, Phil Roux. Phil contributed significantly to the strategic positioning the Company. As part our succession strategy, Tertius Carstens was appointed as the CEO Pioneer Foods. He was previously the business executive responsible for the Essential Foods division and has been with the Group since The Board is confident that he will have a successful tenure as CEO. Cindy Hess stepped down from her role as CFO on 31 October Cas Lamprecht served as acting CFO after her departure until Felix Lombard was appointed as CFO as 1 July Felix was previously the business executive for the Groceries division and has 22 years experience at Pioneer Foods. The Board fully supports him in his new role. Activities the HCC In 2017, the HCC was, among others, responsible for: approving all wage and salary increases; ensuring equal pay for equal work; recommending changes to the STI metrics to emphasise revenue growth as a strategic driver; ensuring adherence to the STI and LTI scheme; recommending increases for non-executive director ( NED ) fees (including representative NEDs), for review by the Board directors and approval by shareholders at the 2018 AGM; reviewing the provisions the Share Appreciation Rights ( SAR ) plan in line with market practice; reviewing the restraint trade agreements with selected employees; considering the effectiveness the Phase 1 BEE Scheme; discontinuing the non-performance-based BEE long-term incentive ( LTI ) scheme in favour extending participation in the Pioneer Foods LTI scheme to high-performing black talent; conducting an analysis the performance assessment scores for executives and senior management during the 2016/2017 period; and recommending minimum shareholding requirements for executives and key employees (the parameters which are set out in part 2 this report). 136 Realising Potential INTEGRATED REPORT

2 Shareholder feedback The remuneration policy was tabled for a non-binding vote at the AGM on Friday, 10 February 2017, with 85% our shareholders endorsing our policy. Our investors provided us with the following feedback on our remuneration policy: Shareholder feedback There is no disclosure weightings on financial indicators for the STI. The LTI is only subject to a HEPS performance condition. Companies should have multiple performance indicators for variable pay. The LTI performance measures should include total shareholder return ( TSR ). A portion the LTI remains subject to continued employment. The dilution limit exceeds 5% issued share capital. No detail is disclosed on share-based payment expenses per executive. STI performance metrics should be weighted more highly towards employment equity, safety and employment engagement factors. There are no explicit ownership targets for key executives. There is an insufficient explanation on the application the remuneration policy to executive pay. Response from HCC We have improved our disclosure in this regard in the 2018 remuneration policy. This is discussed in part 2 this report. The LTI is a SAR, which (in addition to the prospective HEPS performance condition) creates an inherent share price performance underpin, as no value is realised unless the share price increases over the performance period. This creates true shareholder alignment. The dilution limit was agreed in advance with the shareholders. The use the dilution limit is set out in part 3 this report. We have disclosed the cash value the LTIs that have been exercised by the participants in FY2017 in part 3 this report (the implementation report). The STI performance metrics are weighted towards Group financial indicators to encourage growth in the Group s revenue generation, in line with market practice. There is a weighting (10%) attributed to employment equity/gender equity and employee engagement targets. We have introduced minimum shareholding requirements for executive directors and senior managers more detail is disclosed in part 2 this report. The application the 2017 remuneration policy has been explained in the implementation report (part 3 this report). As was the case in 2016, Pioneer Foods aligned its remuneration report to the three-part format recommended in King IV. The elements the remuneration policy in part 2 are now set out in a tabular format, making them easier to navigate. The HCC is satisfied that the remuneration policy achieved its stated objectives in As in previous years, the remuneration policy will be tabled for approval at the AGM to be held on Friday, 9 February This year, the implementation report will be tabled for a separate, non-binding vote at the AGM. The notice the AGM will be available on our website in December Yours sincerely Gerrit Pretorius Chairman the human capital committee 15 November Realising Potential INTEGRATED REPORT

3 PART 2: REMUNERATION POLICY Remuneration governance The HCC is constituted as a committee the Board directors and is responsible for overseeing the formulation and implementation the Group s remuneration policy. The majority the members the HCC are independent NEDs. The NEDs on the HCC take recommendations on their own fees from the executive committee, which are then tabled before the Board and, thereafter, submitted for shareholder approval at the AGM. The members the HCC, and their attendance at HCC meetings in the 2017 financial year, is set out in the corporate governance report on page 106 the integrated report. The CEO, CFO and other members the executive committee attend the HCC meetings by invitation. However, they may not vote on any matters arising at the HCC, and are not present when their remuneration is discussed. The company secretary is the secretary for the HCC. Duties and activities the HCC The duties the HCC are set out in its terms reference, which is available on Pioneer Foods website. The activities the HCC in 2017 are summarised in part 1 this report. Introduction: remuneration policy The remuneration policy largely addresses the principles and policies affecting the CEO, executive management, and senior management the Group. This stakeholder group has a clear line sight the key strategic themes Pioneer Foods that drive the twin objectives : The alignment and execution the strategic focus areas, as well as the rewards made to this team, is essential to the overall performance the Group. The strategic objectives the remuneration policy are to: Support the attainment the Group s business strategies; Attract, retain and motivate key and talented people; Compete in the market place to be an employer choice; Reward individual, team and business performance and encourage superior performance; and Support the key values the Group. The remuneration policy is prepared and implemented on a Group-wide basis (excluding employees falling within collective bargaining units who are subject to separate wage agreements). Where certain fixed or variable components the policy are only available to executive directors or key employees, this is made clear. Recognition is viewed as critical to long-term sustainability, and the Group has financial and non-financial methods rewarding employees as part its employee value proposition. Fair and responsible remuneration Pioneer Foods is committed to the principle fair and responsible remuneration. To this end, it constantly monitors pay levels between employees doing work that is the same, or substantially the same, or that is equal value. Where internal pay disparities are identified, and where the HCC concludes that these are unjustifiable, the HCC is committed to addressing these disparities progressively over time. CEO, executive team and senior management remuneration The remuneration mix the CEO, executive management and senior management is differentiated to attract, retain and reward exceptional talent. The pay mix at the more senior levels places an emphasis on variable pay, making it more at risk. For employees at more junior levels, the mix is weighted towards guaranteed pay. Each element the mix is explained in the summary table on page 142. The on-target policy remuneration mix for the prescribed ficers for the forthcoming year is set out below. This mix is generally aligned with best market practice. ON-TARGET POLICY REMUNERATION MIX 35% 39% 26% CEO 28% 36% 36% CFO TGP STI LTI 25% 30% 45% Company secretary The Company makes LTI allocations based on a set multiple guaranteed remunerations for each participant depending on their level. This methodology and the applicable multiples are explained in more detail in the summary table on page 142. Please note that for the purposes the graph above, the LTI multiples (as a percentage TGP) have been annualised and take into account the vesting prile the SAR (i.e. equal tranche vesting in years three, four and five from grant date). Group strategy alignment Alignment Pioneer Foods strategic direction, specific value drivers and the remuneration the CEO, Group executive management and senior management members, is ensured by the HCC. The total remuneration approach is reviewed by the HCC to ensure the relative percentage guaranteed and variable pay is market related and supportive the Group s strategic objectives. A summarised table each remuneration element for executive directors and executive management is included. This is presented together with a link between each element remuneration and Pioneer Foods value drivers and long-term strategy, as well as the value created by the outcomes the performance conditions across the six integrated reporting capitals that Pioneer Foods uses or affects. Strengthening the brand positions; and Expanding margins 140 Realising Potential INTEGRATED REPORT

4 Summary 2018 remuneration policy Fixed pay Base salary Retirement, medical aid and other benefits Short-term incentive Variable pay Long-term incentive Share Appreciation Rights Purpose and link to strategy Assists in the retention employees and contributes to Pioneer Foods overall employee value proposition. The STI is aligned to the Company s business strategy. To incentivise an increase in revenue. Maximise short- to midterm prits. Retaining key talent. Increase the market capitalisation the Company. Retain key talent and align the interests executives and shareholders. Design TGP is comprised a base salary, as well as benefits such as a retirement fund, medical aid and travel allowances. Annual review guaranteed pay benchmarks are conducted by job family to ensure the retention scarce skills. As a guide, annual remuneration reviews are informed by: Income differential analysis as per the Employment Equity Act; Projected inflation; Internal equity; The external market; Performance the individual; and Affordability. The Company has benefit schemes that all employees participate in. These are: Provident and retirement schemes: membership is compulsory for permanent employees Insured risk benefits: minimum cover 1 times TGP up to 4 times (provident fund) or 7 times (retirement fund), by choice the member Medical aid scheme: membership is not compulsory Travel allowances are also made available in accordance with the South African Revenue Service regulations, where applicable The Group reimburses costs incurred by employees on behalf the Group and has issued separate guidelines on this practice. STIs are based on a percentage guaranteed pay and dependent on the achievement agreed hurdle rates, triggering at an entry target point, and capped at an agreed targeted growth point. STI payments are made annually on 15 December after confirmation the financial business results for the year ending 30 September. The STI pool accrues based on economic prit and growth in economic prit year on year, both which are measured for each division as well as at Group level. If there is no growth in economic prit and economic prit year on year, no bonus is payable. For executive management and Group employees, this refers to the Group pool. For divisional employees, this refers to the divisional pool. Consists an equity-settled SAR award. If performance conditions for any specific period are not met, the relevant SAR allocation is forfeited. Vesting one-third in years three, four and five (with a six-month exercise period). The time allowed to exercise the will be six months after each and every respective vesting date. If performance vesting conditions are not met at the vesting date, the relevant SAR allocation is forfeited. Dilution limit The total number ordinary shares that may be transferred to employees under the SAR scheme is limited to 14.5 million shares (approximately 7.5% the issued ordinary shares at the date approval the scheme by shareholders in 2006, which due to movements in issued share capital has reduced to 6.3%). No qualifying employee can be allocated more than 1 million ordinary shares cumulatively, once converted. Upon vesting the, the Group issues ordinary shares to settle its liability to employees concerned. Opportunity and maximum limit Not applicable The earning potentials are set out below. Role CEO 150% CFO and business executives Allocation level (as % TGP) 100% 120% Divisional executives 50% 80% Payment at achieving the entry target point (based on TGP) is 15% the maximum bonus potential. Payment is capped varying between 15% (the threshold participation level for all employees) and 150% TGP (for the CEO) on achieving the maximum target for growth. A maximum bonus pool (cap) will be calculated as a % economic prit and growth in economic prit annually. The Company refers to a set multiple TGP when awarding to participants, such that in any given year, the cumulative face value the unvested are equal to that the multiple. In determining the annual top-up calculations, the unvested value allocated in the past is taken into account. Role CEO CFO and executive management Divisional executives Face value allocation level (as a multiple TGP) 9 times 5 to 7 times 1 to 4 times 142 Realising Potential INTEGRATED REPORT

5 Fixed pay Base salary Retirement, medical aid and other benefits Short-term incentive Variable pay Long-term incentive Share Appreciation Rights Performance conditions Performance is determined by the performance management system. Higher increases can be given to high-performing individuals, based on performance feedback. The annual review guaranteed pay is effective 1 January. Not applicable Performance conditions (weightings) Growth in revenue year on year: 12.5% weighting, excluding Essential Foods, for which it is zero. Growth in volume: 12.5% weighting, excluding Essential Foods, which is 25%. Growth in headline earnings before interest and tax ( HEBT ) for Group performance and operating prit ( EBIT ) for divisional performance: 65% weighting for all participants Employment equity: 2.5% weighting Gender employment: 2.5% weighting Employee engagement score: 5% weighting For the growth in HEBT measure, the growth calculation will be based on an audited and agreed comparative base for the previous financial year. For the EP calculation, applicable EBIT will be tax adjusted and compared to the Group s WACC for the year as applied to the average net asset base the Group or the relevant division. 50% the award is subject to continued employment, and 50% the award is subject to prospective performance conditions. The performance conditions are set out below. Performance condition CAGR in HEPS Weighting Threshold (15% vesting) 100% CPI plus 1% real growth Stretch (100% vesting) CPI plus 5% real growth Other The Group uses the Task and Hay Chart job grading systems, as well as external benchmarking and survey data as is deemed necessary. The Group will select appropriate peer companies for benchmarking based on industry, organisation size, the specific job that is being benchmarked (some roles are industry specific whereas other roles are generic to business) and any other parameters that are considered valid. Not applicable Discretion The HCC has the discretion to take into account various financial and economic factors that could not reasonably have been foreseen when applying the provisions the STI. Minimum shareholding requirements Participants are encouraged to hold shares equal to 50% the shares that vest in each year after the payment tax for a period five years. Each year s 50% must be added to the minimum shareholding requirement on a rolling five-year basis. 144 Realising Potential INTEGRATED REPORT

6 Early retirement and succession planning arrangement Phil Roux At Phil Roux s request, the Board agreed to his early retirement and stepping down from the Board directors Pioneer Foods effective 30 September He will receive a restraint trade payment to the value 116.7% his TGP, which will be paid as follows: 16.7% will be paid in two instalments, at the end October and November 2017 respectively. The balance will be paid in monthly instalments from December 2017 to November The payments will be subject to the standard legal provisions regarding restraints trade with key executives. It was also agreed that he will make himself available in a strategic advisory capacity to Pioneer Foods until 30 November He agreed to provide such assistance at reasonable notice without the payment any monies other than that set out above. In line with the provisions the SAR Plan Rules, Phil Roux will retain his remaining unvested ; however, the discretionary SAR award, which was made to him in 2015, will be forfeited. Executive contracts The average notice period for the CEO, executive management and senior management is three months. Pioneer Foods is not contractually bound to make gratuitous payments if an executive or senior manager leaves the Group due to underperformance. The vesting STIs and LTIs on termination employment is governed by the relevant plan rules. Restraints trade When warranted by circumstances that could not reasonably have been foreseen, the HCC will exercise its discretionary powers to safeguard the interests Pioneer Foods by entering into restraints trade with executives and other key talent within the Group. The HCC entered into restraint trade agreements with key executives and senior management in The restraint trade payments are subject to continuous employment (for periods ranging from 30 to 36 months) as well as meeting individual performance standards during the employment period. Should employment terminate for any reason whatsoever during that period, the restraint payment will not be made to the executive/senior manager. However, due to the subsequent financial performance Pioneer Foods, the HCC agreed with the affected executives to extend the restraint periods. The restraint will remain operational for one year after the restraint payment has been made. However, the restraint will lapse if the executive/senior manager remains employed for periods ranging from nine to 24 months after the date payment. These payments will be disclosed in the remuneration reports in the year in which they vest. NEDs The remuneration policy, as it relates to non-executive directors, is set out below. Purpose Design Non-executive director fees Chairman Board and committee fees Supplementary fees The overriding principle governing the payment fees to NEDs is that they will be made in the context good governance. The amounts will be determined by the HCC and approved by the Board. The fees paid to different roles, such as that the chairman the Board, may vary from the fees paid to other NEDs, which variation shall be based on market benchmarks applicable to that role. NEDs serving on the Board and on committees are paid a retainer fee for their respective roles, and are not paid per meeting. Benchmarking An adjustment to the fees will be made in the 2017/2018 financial year the increase levels will be broadly in line with increases made to members executive management and across the Company (see below). Where appropriate, independent benchmark advice is sought regarding the levels remuneration for NEDs. If required, the NEDs may be requested to perform work outside their standard duties, which standard duties would include attending the AGM and annual/ interim results presentations, and for this they will be reimbursed based on the time spent and their level expertise. 146 Realising Potential INTEGRATED REPORT

7 The table below sets out the approved NED fees in respect the period 1 April 2017 to 31 March 2018, and the proposed NED fees in respect the period 1 April 2018 to 31 March 2019 (excluding VAT). NED role Fees from 1 April March 2018 Rand Fees from 1 April March 2019 Rand Increase % Board-level fees Chairman Lead independent director Member Audit committee chairman Audit committee member Risk committee chairman Risk committee member Human capital committee chairman Human capital committee member Nomination committee chairman* (per meeting fee) Nomination committee member* (per meeting fee) Social and ethics committee chairman Social and ethics committee member Special ad hoc meetings: chairman Special ad hoc meetings: member * For the chairman and members the nomination committee, the fee from 1 April 2017 to 31 March 2018 was paid on a per-meeting basis. Shareholder engagement Pioneer Foods is committed to engaging shareholders on its remuneration policy, as well as the consistent implementation its remuneration policy, on an annual basis. Following the AGM to be held on 9 February 2018 (relating to the 2017 financial year), Pioneer Foods will put the remuneration policy and implementation report to two separate, nonbinding votes. In the event that 25% or more the shareholders vote against either or both the remuneration policy and/or implementation report, Pioneer Foods will include a note in its SENS announcement for the AGM results inviting dissenting shareholders to engage with the Group on their reasons for voting against either or both these resolutions. The precise method shareholder engagement will be decided by the HCC, but these will include: s and teleconferences Investor roadshows (where feasible) One-on-one meetings with shareholders The results the shareholder engagement, and the HCC s response to shareholder concerns, will thereafter be published in part 1 the remuneration report at the end the following financial year. 148 Realising Potential INTEGRATED REPORT

8 PART 3: IMPLEMENTATION OF THE REMUNERATION POLICY IN THE 2017 FINANCIAL YEAR Compliance with the 2017 remuneration policy The HCC is satisfied that Pioneer Foods substantially complied with the remuneration policy in TGP The maximum increase in salaries for all employees was 6%. This was the same for executive directors. The increment for executive directors is in line with market practice. The average annual TGP increase for executive management, compared to the increases for middle management and general employees, are set out in the graphic below. General employees Executive directors AVERAGE SALARY INCREASES: 2017 We charted the value that we delivered to shareholders (measured in headline earnings and return on equity) versus the average increase in total remuneration paid to executive directors over the past four financial years: Year Adjusted headline earnings (R m) Increase/ decrease % Total executive directors remuneration (R m)* Increase/ (decrease) % 6% 6% Return on equity (%) (50) (84) (39) 20 * Includes TGP, STI and LTIs exercised in that financial year, as well as Restraint trade payments. Single figure remuneration 30 September 2017 The following table sets out the remuneration paid to executive directors and the prescribed ficer: 30 September 2017 Executive directors Basic salary Travel allowances Bonuses and incentives Retirement fund contributions Restraint trade payment # LTI Total PM Roux (30 September 2017)* F Lombard (1 July 2017) CJ Hess (31 October 2016)** Prescribed ficer C Lamprecht *** Total * Retired as director on 30 September ** Resigned as director on 31 October ***Served as acting CFO from 1 November 2016 to 30 June Appointed as CFO on 1 July # See section on early retirement PM Roux for more information on the Restraint trade. The value in the LTI column is based on the value the number SAR awards redeemed during the 2017 financial year, using the strike price at redemption less the strike price the SAR award. 30 September 2016 Executive directors Basic salary Travel allowances Bonuses and incentives Retirement fund contributions LTI Total PM Roux CJ Hess (31 October 2016)* Total executive directors * Resigned as director at 31 October The value in the LTI column is based on the value the number SAR awards redeemed during the 2016 financial year, using the strike price at redemption less the strike price the SAR award. 150 Realising Potential INTEGRATED REPORT

9 STI performance outcomes The STI pool/s only accrue if there is growth in economic prit. This gatekeeper ensures that the STI is self-funding and acts as a protection mechanism for shareholders. Based on the economic prit achievement for 2017, an overall STI pool at zero level accrued. The individual performance metrics that will be applied in the 2018 financial year will be those reflected in the 2018 remuneration policy (set out in part 2 this report). The STI section below reflects the implementation the financial metrics in the 2017 remuneration policy. This was disclosed in part 2 the 2016 remuneration report. The STI performance outcomes for executive directors, against the performance measures that were applicable in the 2017 financial year, are set out below: LTIs awarded The following section sets out the awards that were granted to executive directors under the SAR plan during the 2017 financial year, as well as the performance conditions applicable to the awards: Name awarded Indicative value awards** PM Roux C Lamprecht* * Served as acting CFO from 1 November 2016 to 30 June ** awards multiplied by the actuarial fair value. Performance measurement scale: Growth in economic prit ( EP ) Targets Actual 2017 vesting outcome The performance conditions applicable to 50% the SAR awards granted in the 2017 financial year are set out below: Growth in economic prit (weighting: 40%) Growth on previous year s EP (threshold) Negative 15% growth on previous year s EP (stretch) Negative Zero Performance measurement scale: Growth in headline earnings before tax Targets Actual Growth in headline earnings before tax (weighting: 40%) Specific goals CPI plus GDP growth % 6.41% (threshold) -45% 2017 vesting outcome CPI plus GDP growth % 13.41% (stretch) -45% Zero Targets Actual 2017 vesting outcome Market share and volume (10% weighting) 32% to 32.5% 30.3% Zero Employment equity (5% weighting) 65% to 67% 66.9% Zero Employee engagement (5% weighting) 69% to 72% 70% Zero The targets for employment equity and employee engagement were reached. However, no bonus is payable because the negative growth in EVA. Performance condition and weighting Vesting schedule Performance period Compounded annual growth rate in adjusted headline earnings per share 100% weighting CPI plus 1% real growth (threshold) CPI plus 5% real growth (stretch) Linear vesting between threshold and stretch levels 1 October 2016 to 30 September 2021 (measured over three, four and five years) LTI performance outcomes The following section sets out the achievement the performance conditions for the SAR awards vesting during 2017: Targets Performance measure Threshold Stretch Actual* Vesting %** Compounded annual growth in adjusted headline earnings per share CPI plus 1% real growth CPI plus 5% real growth * The threshold and stretch actual targets were: for the 2014 allocation, R5.84 and R6.77 respectively; and for the 2015 allocation, R7.70 and R8.60 respectively. ** Actual vesting is dependent on the employee being in service on the date vesting. R4.42 Zero 152 Realising Potential INTEGRATED REPORT

10 The following table sets out the (granted, vested, exercised, lapsed and not redeemed) for each executive director and the prescribed ficer for 2017: 30 September 2017 initially allocated Date awarded Exercisable up to date Strike price (cents) Fair value per SAR at grant date (current year grants) (cents) Fair value total granted during the year (rand) redeemed cumulative redeemed in current year forfeited in current year Share price at date redemption (cents) Value increase from strike price to price at redemption/ cash realisation value (rand) Change in directorship: not redeemed Indicative expected value number not redeemed (1) PM Roux* (30 September 2017) CJ Hess (31 October 2016)** /04/ /05/ R /02/ /08/ R /02/ /08/ (2) /09/ /03/ /02/ /08/ (2) /02/ /08/ (2) /02/ /08/ ( ) /02/ /02/ (28 712) /02/ /08/ (40 650) /02/ /02/ (1 090) /02/ /08/ (18 990) /02/ /02/ (3 161) F Lombard *** 2013/02/ /02/ R /02/ /08/ R /09/ /03/ (2) 2015/02/ /08/ (2) 2016/02/ /08/ (2) 2017/02/ /08/ (2) Prescribed ficer C Lamprecht**** 2011/02/ /02/ /02/ /02/ /02/ /02/ /02/ /08/ /02/ /08/ (20 699) * Retired as director. ** Resigned as director. *** Appointed as director. **** Served as acting CFO from 1 November 2016 to 30 June (1) not redeemed at financial year-end multiplied by the applicable year-end Pioneer Foods share price, less the strike price these instruments. (2) Out the money. 154 Realising Potential INTEGRATED REPORT

11 30 September 2016 initially allocated Date awarded Exercisable up to date Strike price (cents) Fair value per SAR at grant date (current year grants) (cents) Fair value total granted during the year (rand) redeemed cumulative redeemed in current year Share price at date redemption (cents) Value increase from strike price to price at redemption/ cash realisation value (rand) not redeemed Indicative expected value number not redeemed (1) Executive directors PM Roux* /04/ /05/ R /02/ /08/ R /02/ /08/ R /09/ /03/ (2) /02/ /08/ R CJ Hess /02/ /08/ R /02/ /02/ R /02/ /08/ R /02/ /02/ R /02/ /08/ R /02/ /02/ R * PM Roux entered into a zero cost collar to hedge and share appreciation rights the 1 April 2013 and the 28 February 2014 allocations respectively. (1) not redeemed at financial year-end multiplied by the applicable year-end Pioneer Foods share price, less the strike price these instruments. (2) Out the money. 156 Realising Potential INTEGRATED REPORT

12 The table below sets out the usage the dilution limit for Pioneer Foods LTI as at 30 September issued shares 000 Percentage total ordinary issued share capital % Opening balance available Redeemed (238) (0.10) Change in directorship LTI awards/allocations made to participants Forfeited/lapsed (termination employment) (500) (0.21) Closing balance available NEDs The table below sets out the NED fees that have been paid to each NED in the 2017 financial year. Approval This report was approved by Pioneer Foods human capital committee on 15 November Yours sincerely Name NED Directors fees ZL Combi (chairman) 869 N Celliers 396 Pr ASM Karaan 435 NS Mjoli-Mncube 319 G Pretorius (lead independent director) 693 PJ Mouton 354 SS Ntsaluba 497 AH Sangqu 424 LE Mthimunye-Bakoro* 410 NW Thomson 582 Gerrit Pretorius Chairman the human capital committee * Appointed to the Board on 1 November Realising Potential INTEGRATED REPORT