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Remuneration
report
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Hyprop Investments Limited
Integrated annual report and consolidated financial statements
2017
Individual performance reviews
Individual performance reviews are completed annually on the company’s employee self-service system after performance discussions with the relevant
line manager. These reviews assist the manager and employee to build on individual strengths and identify areas for improvement, to be more effective
and efficient.
All employees are subjected to the same appraisal process and rating criteria. This encourages equality and imposes standard measures of performance
in the company.
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Professional conduct
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Business processes
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Customer service
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Business operations
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Employee management
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Implementation of company strategy.
Performance is reviewed on a five point scale. This method offers a high degree of structure for appraisals.
Performance review outcome
2017
2016
Performance requires improvement
5%
8%
Performance consistently meets expectations
52%
56%
Performance exceeds expectations
35%
32%
Exceptional performance delivery
8%
3%
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Employees are rewarded on the outcome of KPDs and performance reviews
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STIs payable in December and salary increases are implemented from January each year
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STIs and salary increases are approved by the remuneration and nomination committee
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Exceptional performance is rewarded with a higher incentive, after considering recommendations from general managers, regional executives and
executive directors
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The maximum potential STI for senior management is six months’ salary and is subject to the remuneration committee’s discretion and approval
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A significant portion of senior management’s reward is variable, based on achieving group performance targets, as well as individual contributions to
the growth and development of their business, applicable division and wider company
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STIs for executive directors are aligned with strategic objectives and are at the remuneration and nomination committee’s discretion.
Long-term incentives (LTI)
Long-term incentives (LTIs) reward long-term decisions that support dividend and capital growth.
Conditional unit plan (CUP)
The CUP was approved by shareholders in 2013. The purpose of the CUP is to align employee performance with stakeholder interests and to retain skilled
and talented employees. Annual allocations are made through the award of performance condition and retention shares (70:30).
Vesting of the performance condition shares are subject to performance conditions stipulated in the rules of the plan.
Conditions for the performance component of the CUP:
Vesting percentage
(1)
Threshold
50% of awarded performance shares vest at threshold. No performance shares will vest for performance below threshold
On target
100% of awarded performance shares vest for performance on target
Stretch
150% of awarded performance shares vest for performance at stretch levels
(1)
Linear vesting will apply for performance between ‘threshold’ and ‘on target’ or between ‘on target’ and ‘stretch’ performance. For example, where performance is exactly
halfway between threshold and on target, the portion of performance shares that will vest will reflect a similar ratio, ie 75%.
Performance conditions:
Performance
condition
Detail
Weighting Threshold On target
Stretch
Growth in distribution
per share relative to
peer
(2)
group
Calculated as simple growth in distribution per share at the end of
performance period, over distribution per share of prior financial year
40%
95%
102,5%
110%
Share price
performance relative
to peer
(2)
group
Measured as growth in share price over performance period (difference
between share price at the end and start of performance period)
40%
95%
105%
120%
Strategic component Determined by the remuneration committee
20% Determined by the remuneration committee
(2)
The peer group comprises the five largest South African REIT companies by market capitalisation listed on the JSE
Shares are offered to executives, senior managers, operational and nancial managers and employee with speci c core, critical or strategic skills. Allocations
are approved by the nomination and remuneration committee. Performance shares vest three years after initial allocation, provided that relevant
performance conditions have been met.