Remuneration Report

The objective of the group’s remuneration management strategy is to employ the necessary skills for the group to achieve its strategic objectives and to base remuneration on personal and group performance in accordance with competitive market practices. The application of the group’s remuneration management practices ensures that performance management is an integral part of remuneration with the aim of attracting, retaining and motivating talented people and encouraging superior performance. It also forms an integral part of competing to be a preferred employer. The board has delegated responsibility for oversight of the group’s remuneration management policy and practices to the remuneration committee, as indicated in the board committees section of the Corporate Governance report here

Remuneration policy


As a listed agricultural company operating throughout southern Africa, the Crookes Brothers Limited (CBL) remuneration policy needs to be consistent throughout the group, while at the same time taking account of regional and industry norms. This is achieved by offering a combination of fixed and incentive-based remuneration to attract the right mix of expertise and experience to achieve the group’s objectives.


The policy has the following key objectives:

  • To support the group’s strategic objective of becoming a major player in the southern African agricultural sector;
  • To support the group’s objective of becoming employer of choice in regions in which it operates;
  • To attract and retain people with the right skills, expertise, experience and commitment to achieve the required growth and financial performance to realise the group’s strategic objectives;
  • To reflect the group’s culture of equity and fairness, in correlating levels of remuneration with individuals’ contribution, roles and responsibilities;
  • To take account of scarce skills and regional variances in order to attract appropriate skills;
  • To motivate employees and reward them for exceptional performance; and
  • To enable employees to share in the financial success of the company.

Remuneration structure

The remuneration packages offered by CBL comprise the following elements, as appropriate for different job grades:

  • Fixed remuneration, including base pay and benefits (all permanent staff);
  • Short-term incentive, based on achievement of short-term financial and strategic objectives (Paterson bands C3 to F1); and
  • Long-term incentive, comprising share options, based on achievement of long-term financial and strategic objectives, to reward senior executives for increasing returns to shareholders (Paterson D, E and F bands).

Fixed (guaranteed) remuneration

The following basic structure applies in terms of fixed remuneration:

  • All permanent positions are defined by a job description and are allocated a Paterson grading according to the job description;
  • Seasonal jobs (e.g. picking fruit and cutting cane) are remunerated purely on a task basis;
  • Salary bands generally ranging from 80% to 120% of a median are defined for each Paterson grading;
  • The salary bands are adjusted periodically using the results of appropriate external salary surveys;
  • An employee’s position within a salary band depends on his or her performance, skills, experience, commitment and years of service, as well as the scarcity of skills in the relevant job category;
  • Remuneration for employees in the C band and above is defined as a “total-cost-to-company package”;
  • Annual increases are awarded to take account of the impact of inflation on the cost of living, and also to adjust employees’ relative salaries within a salary band; and
  • Apart from annual increases, increases are also granted for promotions when these occur, or special adjustments to take account of the factors listed above.

Short-term incentive

Performance-based incentive pay is offered to employees ranked Paterson grade C3 and above. Performance is evaluated annually at year end and bonuses awarded accordingly. Bonuses are paid within three months of the year end. Performance reviews performed for all qualifying employees ensure that problem areas are addressed, that a transparent process is maintained and appropriate development plans are put in place. Performance is rated according to a balanced scorecard which takes into account individual, divisional and company performance, with a mix of subjective and objective measures, as well as each individual’s achievement of specific objectives and personal development targets. The performance ratings of employees ranked D3 and below are reviewed by the executive committee and those for executives by the remuneration committee of the board to ensure, that the ratings are equitable and consistent. A detailed performance bonus policy outlines the philosophy and process in detail. The policy is updated by the remuneration committee on a regular basis to meet the needs of the group and to maintain alignment with industry best practice.

Long-term incentive

The long-term incentive scheme is designed to retain key senior executives in the medium- to long-term, to focus their attention on long-term strategic imperatives and to ensure sustainable future growth of the group. This scheme is governed by a detailed policy which is also updated as required by the remuneration committee. In terms of the scheme, share options may be offered to senior executives on an annual basis. Eligibility criteria, the quantum of the allocations and the conditions governing each allocation are determined by the remuneration committee.


The board remuneration committee meets bi-annually to consider strategic and policy issues, review remuneration of non-executive directors, approve salary increases for executives and senior management, approve the performance bonus and approve the granting of share options. The board, in consultation with the remuneration committee, may amend the remuneration policy from time to time to comply with applicable legislation and/or industry best practice, or as circumstances may require. The remuneration committee comprises three non-executive directors and is chaired by an independent nonexecutive director. The managing director attends the meetings by invitation and assists the committee in its deliberations, except when issues relating to his own remuneration or performance are discussed. No executive directors are involved in determining their own remuneration.

Non-executive directors’ remuneration

The remuneration of non-executive directors, including that for participation on board committees, is reviewed annually in terms of market standards. Fees are recommended by the board and approved by the shareholders at annual general meetings. Non-executive directors are compensated based on the responsibilities allocated to them and their overall contribution and input to the company, not just for attendance at meetings. On this basis, nonexecutive directors receive an annual fee, payable quarterly in arrears, for their services on the board and board committees. There are no contractual arrangements for compensation for the loss of office for any directors. Non-executive directors do not receive short-term incentives nor do they participate in the company’s long-term incentive scheme. Over and above their remuneration as members of the board and its various committees, non-executive directors are compensated at market-related rates for undertaking consulting work for the company.

Performance bonus policy

All employees occupying positions grade Paterson C3 and above, qualify for a performance-based incentive bonus. The quantum of the maximum bonus ranges from 20% to 60% of total cost-to-company (TCTC) remuneration package, based on grade. The performance of each eligible employee is evaluated in terms of a “balanced scorecard”. Objective production/profit targets constitute 40% of the scorecard, subjective competency targets constitute 40% and group strategic targets the remaining 20%. The total bonus payable to each eligible employee is adjusted in accordance with a group profitability target, based on return on capital employed, set annually by the remuneration committee, the adjustment being in the ratio of achieved return to target return. No bonuses are paid if the achieved return is less than 70% of the target return, and a 30% bonus premium is paid if the achieved return is greater than 120% of target return, capped at 100% of the individual’s TCTC package. The target for headline earnings for the 2016 financial year was R70 million and the achieved return was R60,3 million. The bonus adjustment ratio accordingly amounted to 86,1%, which was adjusted upwards by the remuneration committee to 90% in view of the adverse impact of the drought on the group’s profitability. The board has the discretion to amend or cancel the payment of the performance-based incentives to all or individual employees.

Directors’ fees and remuneration

Executive directors

Executive directors are remunerated in accordance with the remuneration policy and do not have rights to additional benefits which are not available to be awarded to other executive management.

Non-executive directors

Non-executive directors do not have employment contracts with the company and are paid for their services as both directors and board appointed committee members and in accordance with the group’s remuneration policy. Fees for non-executive directors are recommended by the remuneration committee, endorsed by the board and approved by shareholders at the annual general meeting.


The Crookes Brothers share option scheme

As approved at an annual general meeting of shareholders, a total of 900 000 ordinary shares is reserved and placed under the control of the directors for the purpose of the Crookes Brothers Share Option Scheme for employees. At the discretion of the board, share options are awarded for outstanding contributions to meeting the strategic objectives of the business.

Options are exercisable at a price equal to the volume-weighted average price of a share on the JSE over the 20 trading days immediately prior to the day on which the option was granted. Options vest after stipulated periods over five years and are exercisable up to a maximum of ten years from the date of grant.