BUSINESS MANAGEMENT ASSIGNMENT

Reward and Recognition:

Remuneration philosophy

Transnet’s payment principles are created to attain the following:

Position the payment plan and operations with Transnet’s mandate, vision and company
plan and to make sure that there is a united approach for payment management at all
Transnet companies that captivates, drives, captures and keeps the skills necessary to
obtain Transnet’s company goals but most precisely to:

Keep payment-related prices; help a high-efficiency business through the reward and
recognition of quality performance; provide agility and alertness to developing company
demands; gain excellent return on expenses; comply to lawful, regulatory, moral and
best-practice levels; to make sure of the prolonged sustainability of the company;
adhere with business authority and nationality; adhere with working and tax rules; and
attempt to make sure that payment and motivation strategies and practices are short
and simple to comprehend.

The payment principle considers 3 working levels informed by complications, decision-

making and common sense these are:

Administrative and management level; first-line managers, expert, and technologists

(grade level G) are part of the negotiating unit; and junior workers(grade levels H to
L)are part of the negotiating unit.

Guaranteed pay

Transnet aims to position warranted payment with the market median. Yearly wage
increases are accepted by the Remuneration, Social and Ethics Committee of the
Board. Yearly growths for management levels are enlightened by single performance
ranking. To find out the yearly mandate for guaranteed pay increases, we look at the
following criteria:

The local economic and company view; outside market forecasts and the past of market
motions and increases allowed; local and inside employees turnover rates; outside
equality(market benchmarks) formed from market median; inside equality; and
reasonableness

Benefits

All Transnet workers are made to join the Transnet retirement fund which offers or
covers costs such as retirement sponsoring, danger cover and a death welfare. The
Transnet retirement fund accounts for a total of 19,5% in contributions which is made up
of manager contributions of 12% that covers the danger and death welfare part and also
a worker contribution of 7,5%.

Variable pay

Transnet has both short-term and a long-term additional rewards plans offered for good
performance to employees. The short term rewards plan was recreated in the reporting
year to motivate the gaining of stretch company targets and to pay workers for their
input or hard work. It is available to all workers and is regulated by specific rules that are
accepted by the Remuneration, Social and Ethics Committee Board.

The long term rewards plan is available to administrative and chosen higher-ranking
managers. Yearly additional reward instalments must properly relate to performance
attained opposed to yearly goals in line with long term value for the stakeholder. Single
and business performance targets for both monetary and sustainability-related are
customized to the necessities of the firm and evaluated constantly to make sure the stay
relevant.

Individual performance management

Transnet has a general performance structure that is in line with the Statement of
Strategic Intent and the Shareholders Compact. The structure is expressed into a yearly
Transnet scorecard and the scorecard of the Group Chief Executive which then falls to
all employers.

Performance management for the Group Leadership Team (GLT)

Every GLT member has their own scorecard that has its goals and standards that come
from the general Transnet performance scorecard, expressed from the Transnet
Performance Framework. Performance goals are in line with the firms strategy and GLT
members are paid for the input to Transnet’s achievements. GLT members go through
thorough performance evaluations to trace their improvements and to talk about
differences from their performance strategies.

Remuneration for the GLT

There are 7 factors that support Transnet's approach to paying higher-ranking and
administrative management, which is by:

Using skills management as a strategic company motivator to create individual abilities

to firm size needs; a changed or unique approach to get and keep skill, to make sure
high quality individuals in high-mission critical places; building leadership capabilities;
reorganization possibilities or chances aligned with sequence strategies; helping single
development and job path growth; making sure there is fair payment; and paying people
for quality performance.

Short- and long-term incentive payments

The STI cost for the 2018 fiscal year was founded on the accomplishment of the yearly
EBITDA as well as the effect of the primary and secondary change at Group and
Operating Division levels.

The 2014/15 conditional award in honour of the Transnet long-term incentive (LTI)
strategy vested at the end of the 2018 fiscal period. The associates of the Transnet GLT
were worthy for remuneration in respect of the LTI strategy founded on the ground rules
of the strategy and happened at the end of April 2018.
Remuneration structure for non-executive directors

Non-administrative managers are chosen by the Stakeholder Representative for a 3

year term. Transnet’s Memorandum of Incorporation says that the non-administrative
manager must be put in for re-election for each of the 3 years at the firms yearly general
meetings. The Stakeholder Representative accepts the price to be paid to non-
administrative managers before hand also, non-administrative managers are
remunerated a yearly retainer and an extra retainer payment for committee affiliation but
they are not paid for the appearance of meetings. Money to be paid to non-
administrative managers is to be changed based on their designations to different
committees of the Board.

References

https://www.transnet-ir-2018.co.za/remuneration.php

name of website – transnet freight rail

name of webpage - Transnet Online Integrated Report 2018