Strategic remuneration
LINKING PAY TO OUR STRATEGY
In August 2021, Datatec announced a comprehensive
Strategic Review to consider options and initiatives to unlock
and maximise shareholder value going forward. The Strategic
Review aims to address the persistent gap between Datatec's
valuation and the inherent value of its underlying assets while
also ensuring that the Group is positioned to take full
advantage of the positive market dynamics for its technology
solutions and services. In parallel, the strategy of pursuing a
combination of corporate and business actions aimed at
enhancing the competitiveness and profitability of our
subsidiaries and operating divisions in order to enhance value
remains in place. 
The Group's remuneration policy seeks to align remuneration to the achievement of the Group's strategic objectives.
Strategic objective
Short-term incentive ("STI")
Long-term incentives
01 Strategic objective
VALUE GENERATION
02 Short-term incentive ("STI")
FY22 and FY23 – personal key performance indicator for the executive directors' STI:
- Reduce structural discount
03 Long-term incentives
FY22: The performance condition for two‑thirds of Conditional Share Plan ("CSP") vesting in 2024 is absolute total shareholder return ("TSR").
FY23: The performance condition for the whole of the CSP vesting in 2024 is absolute TSR.
Furthermore, executive share ownership requirements and the additional two-year holding period post vesting for Deferred Bonus Plan ("DBP") and Deferred Bonus Warrant ("DBW") ensure shareholder alignment over the long term.
FY23 – new STI deferral plan DBW co-investment only benefits participant if share price rise is generated.
01 Strategic objective
UNDERLYING EARNINGS PER SHARE ("UEPS")
02 Short-term incentive ("STI")
FY22 target for 45% of STI was budget uEPS.
FY23 target for 35% of STI is budget uEPS.
03 Long term incentives
FY22: Performance condition for one-third of CSP vesting is uEPS growth over three years to FY24.
01 Strategic objective
EARNINGS BEFORE INTEREST, TAXATION, DEPRECIATION AND AMORTISATION ("EBITDA")
02 Short-term incentive ("STI")
FY22 target for 20% of STI was budget Group EBITDA.
FY23 target for 30% of STI is budget Group EBITDA.
03 Long-term incentives
–
01 Strategic objective
OTHER QUANTITATIVE MEASURES ADDRESSING CURRENT SHORT-TERM PRIORITIES
02 Short-term incentive ("STI")
FY22 and FY23 metrics addressing Logicalis and Westcon International working capital.
03 Long term incentives
–
The context in which the Remuneration Committee has set STI and LTI targets for FY23 flows from the strategic imperatives of the Group.
The committee believes the use of absolute TSR as a performance condition for CSP vesting will align remuneration with value creation for shareholders and has decided to use this metric as the sole performance condition for the FY23 CSP grant.
Motivating the drive to improve profitability remains of high importance for which the uEPS and EBITDA growth targets are key in the STI. The committee has noted that the key metric used by investors for valuing businesses in our sector is EBITDA and hence it felt this metric should receive more prominence in the STI structure. After consultation with shareholders it was decided to change the relative weightings of uEPS and EBITDA in the FY23 STI structure to give more weight to EBITDA while maintaining the position of uEPS as the primary metric.
The Remuneration Committee believes that the remuneration policy and implementation achieve an equitable alignment of shareholder and management interests.
Please refer to the remuneration report in the annual report for more information.
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