The Remuneration Committee sets and monitors executive remuneration for the company, in line with the executive remuneration policy.
This policy has as its objectives to:
In particular the Remuneration Committee is responsible for:
For 2007, members of the Committee comprised the following non-executive directors:
During the year, four meetings of the Remuneration Committee were held. Attendance by members or their designated alternates was as follows:
|Number of meetings attended|
|CB Brayshaw *||1|
|AJ Trahar *||1|
|WL Nkuhlu **||3|
|FB Arisman **||3|
|SM Pityana **||3|
|* Entitled to attend only one meeting.|
|** Attended all meetings since appointment to committee.|
All meetings of the committee are attended by the chief executive officer and executive vice president – organisational development except when their own remuneration or benefits are being discussed. The services of Deloitte & Touche are retained to act as independent, expert advisers on executive remuneration.
The following principles are applied in determining executive remuneration:
Shareholders approved the introduction of two new schemes to replace the old share incentive scheme at the annual general meeting held on 29 April 2005. The purpose of both schemes is to align the interests of shareholders and the efforts of executives and managers.
To the extent that structured company performance targets are achieved, the BSP allows for the payment of an annual bonus, paid in part in cash and in part in rights to acquire shares.
The global scramble for skills in the resources sector has had the effect of greatly increasing levels of remuneration for skilled professionals and managers. Whilst AngloGold Ashanti has been relatively successful in retaining many of its skilled professionals and managers, its competitive position in respect of remuneration has been significantly eroded. This is especially true of the awarding of shares and the magnitude of bonuses paid, which compare unfavourably both within South Africa and globally.
At the forthcoming annual general meeting, the company will propose raising the levels of maximum performance bonus payable and the maximum levels of bonus share awards, reducing the vesting period of bonus shares from three years to two years, and altering the split between company and individual performance in determining the bonus.
The LTIP allows for the granting of rights to acquire shares, based on the achievement of stretched company performance targets over a three-year period.
These targets are based on the performance of earnings per share (EPS) and relative total shareholder return (TSR), whereby the company will need to consistently outperform its gold company peers. Additionally, certain strategic business objectives, which the Remuneration Committee will determine from time to time, will also need to be met.
Executive director remuneration currently comprises the following elements:
Service contracts of executive directors are reviewed annually. Mark Cutifani, as chief executive officer, has an initial contract of 24 months, but with a 12-month notice period. The notice period for the chief financial officer and executive director, Srinivasan Venkatakrishnan, is nine months. The contracts also deal with compensation if an executive director is dismissed or if there is a material change in role, responsibilities or remuneration following a new shareholder assuming control of the company. Compensation for these particular circumstances is calculated at twice the notice period earnings.
The following table details fees and allowances paid to non-executive directors in 2007:
|All figures stated to the
with effect from(2)
retired with effect from(2)
|Directors' fees(3)||Com-mittee fees||Travel(4)||Total||Directors'
|RP Edey (Chairman)||1,005||220||128||1,353||919||160(6)||113||1,192|
|Dr TJ Motlatsi (Deputy chairman)||335||186||–||521||300||130||–||430|
|RE Bannerman||10 Feb 06||150||107||128||385||113||26(6)||59||199|
|Mrs E le R Bradley||125||195||–||320||110||150(6)||–||260|
|CB Brayshaw(5)||05 May 07||46||78||–||124||110||138(6)||–||248|
|Mrs C Carroll||5 May 07||9 Oct 07||29||–||–||29||–||–||–||–|
|Dr SE Jonah (President)||12 Feb 07||90||62||–||152||157||120||–||277|
|R M?dori||9 Oct 07||107||–||–||107||111||3||–||114|
|JH Mensah||4 Aug 06||150||77||128||355||47||–||28||75|
|Prof WL Nkuhlu||4 Aug 06||125||110||–||235||46||25||–||71|
|SM Pityana||13 Feb 07||115||109||–||224||–||–||–||–|
|AJ Trahar||5 May 2007||48||38||–||86||110||40(6)||–||150|
|PL Zim||4 Aug 06||–||–||–||–||83||60||–||143|
|Total – non-executive directors||2,732||1,643||576||4,951||2,440||1,263||313||4,016|
|DD Barber||4 Aug 06||–||–||–||–||–||–||–||–|
|AH Calver||1 Jan 07||–||–||–||–||–||–||–||–|
|PG Whitcutt||9 Oct 07||–||33||–||33||–||37||–||37|
|Total – alternate directors||–||33||–||33||–||37||–||37|
|(1)||Where directors' compensation is in dollars, amounts reflected are the actual South African rand values at the date of payment.|
|(2)||Fees are disclosed only for the period from or to which, office is held|
|(3)||At the annual general meeting of shareholders held on 4 May 2007 shareholders approved an increase in directors fees with effect from 1 May 2007.|
|– Chairman||– $150,000 per annum|
|– Deputy chairman and president||– R360,000 per annum|
|– South African resident directors||– R135,000 per annum|
|– Non-resident directors||– $25,000 per annum|
|(4)||A payment of a travel allowance of $5,000 per meeting is made to non-executive directors who travel internationally to attend board meetings. In addition, AngloGold Ashanti is liable for the payment of all travel costs.|
|(5)||Mr Brayshaw received fees from AGRe Insurance Company Limited, a wholly owned subsidiary, for his roles as both director and as a member of its audit committee.|
|(6)||Figures have been reclassified to conform with current year presentation.|
Executive directors do not receive payment of directors' fees or committee fees.
Following the appointment of Mark Cutifani as chief executive officer, AngloGold Ashanti re-organised its executive management teams with effect from 1 November 2007, in line with the renewed strategic focus of the company. A decentralised regional operating structure was established with three executive vice presidents for Africa, the Americas and Australasia reporting directly to the chief executive officer. In addition, the heads of business strategy, business development, business effectiveness, sustainability and organisational development were made executive vice presidents. These operations and functional executive vice presidents, together with the vice president – treasurer, the vice president – compliance and corporate administration, the chief executive officer and the chief financial officer, constitute the company’s executive management.
|All figures in R000||Appointed with effect from(1)||Resigned/ retired with effect from(1)||Salary||Compen- sation and recruit- ment(2)||Per- form-ance related pay -ments(3)||Pension scheme conti- dutions||Other Benefits(4)||Encashed Leave(5)||Sub Total||Pre-tax gains on share options exer-cised||Total|
|Executive directors' remuneration 2007|
|M Cutifani||17 Sep 07||1,594||15,197||963||–||704||–||18,458||–||18,458|
|R Carvalho Silva(6)||30 Sept 07||4,468||20,240||1,001||2,121||1,594||1,496||30,920||4,574||35,494|
|RM Godsell||30 Sept 07||5,029||9,794||–||763||92||1,853||17,531||35,664||53,195|
|NF Nicolau**||12 Nov 07||4,925||16,688||958||783||826||125||24,305||2,367||26,672|
|Executive officers' remuneration to 30 November 2007|
|Representing 15 executive officers||28,400||–||6,219||3,590||259||670||39,138||11,483||50,621|
|Executive officers' remuneration from 1 December 2007|
|Representing 10 executive officers||2,422||–||513||299||43||360||3,637||–||3,637|
|Total executive directors, executive officers and executive management remuneration – 2007||51,401||61,919||11,368||8,330||3,518||4,748||141,284||54,088||195,372|
|**||Resigned from board effective 12 November 2007 and left the company effective 31 January 2008.|
|(1)||Salaries are disclosed only for the period from or to which office was held except in respect of Messrs Godsell, Carvalho Silva and Nicolau, which amounts reflect total payments made to the date of this report.|
|(2)||Compensation and recruitment expenses relate to the once-off payments made to Messrs Godsell, Carvalho Silva and Nicolau on their retirement/resignation from the board and company, and to Mark Cutifani on his appointment as chief executive officer.|
|(3)||In order to more accurately disclose remuneration received/receivable by executive directors, executive officers and executive management, the tables above include the performance related payments calculated on the year’s financial results.|
|(4)||Includes health care, personal travel and relocation expenses, and in respect of Mr Carvalho Silva, a compulsory payment to an unemployment insurance fund and a medical promise payout in respect of Mr Nicolau.|
|(5)||In 2005, AngloGold Ashanti altered its policy regarding the number of leave days that may be accrued. As a result surplus leave days accrued are compulsorily encashed.|
|(6)||Mr Carvalho Silva’s earnings were paid in Brazilian real and US dollars. For the purposes of this annual report, values have been converted to South African rands using the monthly average rates of exchange|
|All figures in R000||Appointed with effect from(1)||Resigned/ retired with effect from(1)||Salary||Per- form- ance related pay -ments(2)||Pension scheme conti- dutions||Other Benefits(3)||Encashed Leave(4)||Sub Total||Pre-tax gains on share options exercised(5)||Total|
|Executive directors' remuneration 2006|
|RM Godsell (Chief Executive Officer)||6,334||2,400||935||63||–||9,732||2,197||11,929|
|R Carvalho Silva||5,195||1,165||2,088||50||437||8,899||–||8,899|
|S Venkatakrishnan||6 May 06||3,801||1,165||646||–||–||5,613||–||5,613|
|Executive officers' remuneration 2006|
|Representing 16 executive officers||29,410||6,658||3,208||1,419||265||40,960||7,461||48,421|
|Total executive directors and executive officers remuneration – 2006||49,581||12,553||7,614||1,645||845||72,238||13,110||85,348|
|(1)||Salaries are disclosed only for the period from or to which, office is held.|
|(2)||In order to more accurately disclose remuneration received/receivable by executive directors and executive officers, the tables above include the performance related payments calculated on the year's financial results.|
|(3)||Includes health care, personal travel and relocation expenses.|
|(4)||In 2005, AngloGold Ashanti altered its policy regarding the number of leave days that may be accrued. As a result, surplus leave days accrued are compulsorily encashed.|
|(5)||On exercising of options granted in terms of the AngloGold share incentive scheme, Messrs Godsell and Nicolau applied proceeds from the sale of the shares to acquire 3,833 (2005: 8,717) and 2,900 AngloGold Ashanti shares respectively.|
Options and rights to subscribe for ordinary shares in the company granted to, and exercised by, executive directors, executive officers/management and other managers during the year to 31 December 2007 and subsequent to year-end.
AngloGold Ashanti Annual Report 2007 – Annual Financial Statements