<>Datatec

Fair and responsible remuneration

Remuneration structure

Datatec's purpose is to deliver value to all stakeholders through technology agility and service excellence. In order to do so, our executive directors and staff are incentivised to achieve outcomes aligned with this objective in their individual key performance areas for both STIs and LTIs. The Group's remuneration policy seeks to align remuneration to the achievement of the Group's strategic objectives.

Aligning remuneration to our strategic objectives

Objectives of our remuneration policy

• Set remuneration levels to attract and retain the best local and international talent who will enhance business performance
• Recognise and reward superior performance when it occurs
• Direct employees’ energies and activities towards key business goals and strategic outcomes
• Align employees’ and shareholders’ interests

Key principles of our remuneration policy

• Reward all employees suitably for their contribution to the Group’s operating and financial performance
• Apply fair and responsible pay principles to all employees across the Group
• Promote a common interest with shareholders
• Consider the international ICT industry, market and country benchmarks to ensure the Group’s remuneration is competitive in regions in which the Group operates, particularly the US, Brazil and the UK
• Make a significant proportion of the remuneration of executive directors and senior managers performance-based
• Balance the performance-based element of remuneration between the achievement of short-term and long-term objectives

The key principles of our remuneration policy are enshrined in the three main elements of remuneration:

ELEMENT OF REMUNERATION		DESCRIPTION AND POLICY		ELIGIBILITY

The STI is calculated in relation to base salary as follows:

Base salary x on-target STI percentage x [(personal score x personal weighting) + (corporate score x corporate weighting)]

For executive directors: 80% corporate 20% personal - with the exception of FY21 as it has been changed to 70% corporate; and 30% personal as a result of the global COVID-19 pandemic

For other senior management: 50% corporate 50% personal (with exceptions where appropriate as agreed by the Remuneration Committee)

Shareholder engagement

A programme of shareholder consultation was undertaken both in FY19 and FY20 to ensure shareholders' views on remuneration were properly and accurately addressed and taken into account in the Group's remuneration policy and implementation practices.

Directors' remuneration

Some of the main remuneration outcomes, after extensive shareholder engagement, are as follows:

• Base pay of the CEO and CFO was reduced in FY20 by 20% and 10% compared to FY19
• Executives received no increases to guaranteed pay for the forthcoming year due to COVID-19. Likewise non-executive directors will receive no fee increases
• STIs earned for FY20 decreased 56% compared to FY19
• We awarded LTIs, but as a result of our lower STI levels, the deferral and co-investment by the Company into the DBP was lower compared to previous years. CSP awards were made in line with our normal policy
• A clawback and malus policy was implemented with effect from 1 March 2020

The targets and outcomes of the annual bonuses of the executive directors for FY20, shown as a percentage of base salary and split by the bonus elements, are illustrated below:

The FY20 STI bonus structure comprised Company and individual performance targets. The outcome is set out in the following table:

(3) Personal KPIs

The metrics used for the FY21 STI include cash/working capital targets which the Remuneration Committee views as particularly critical under the COVID-19 environment in addition to uEPS and EBITDA targets. Personal KPIs include COVID-19 crisis management, culture/leadership (CEO), post-COVID-19 crisis strategy (CEO), Westcon International refinancing (CFO) and external auditor transition (CFO).