Fair and responsible remuneration

Our performance and pay outcomes in FY24

The Group delivered a strong operational and financial performance in FY24 with Westcon International continuing its excellent performance and Logicalis International also recording a strong result. Logicalis Latin America faced difficult market conditions, especially in Argentina and Brazil, which adversely affected its performance in FY24 but has already undertaken a reshaping of its business model.

The main remuneration outcomes in FY24 are as follows with the detail set out in the policy and implementation sections of this report:

• Executives received a 6% increase in guaranteed pay for FY24 having received no increase the previous year;
• Likewise, non-executive director fees were increased by 6% after no increase in the prior year;
• STIs earned for FY24 were higher compared to FY23 primarily because underlying EPS exceeded the target;
• The CSP awards granted in May 2021 with a performance period that ended 29 February 2024 vested at 100%, because TSR and uEPS growth target performance conditions were achieved;
• Overall LTI for the Datatec executives was lower in FY24 than the previous year because of the Westcon EAP which crystallised in March 2023 with the payout for the Datatec executive directors included in FY23; and
• Management incentive plans (“MIPs”) were implemented for Logicalis International and Westcon International management teams

These principles are enshrined in the three main elements of remuneration:

	Element of remuneration	Description and policy	Eligibility
	Guaranteed package	Base salary and benefits including retirement and medical scheme contributions.	All employees
	Short-term incentives (STIs)	Annual bonus plan with performance targets, subject to deferral as explained below.	Group executives participate in an annual STI plan as explained in detail below. Management of divisions participate in STI plans similar to the Group executives but based on divisional performance targets and personal performance targets. Non-management employees typically receive lower levels of STIs based more on personal targets rather than on corporate goals.
	Long-term incentives (LTIs)	Share-based remuneration plans with performance targets. Two share-settled Group plans are used, namely: CSP – a performance share plan; and DBW – a portion of the bonus is deferred and used to acquire shares and the Company contributes a co‑investment in the form of share appreciation rights. Both of these elements are forfeitable. A number of cash-settled share-based remuneration plans are operated in divisions. These are explained in further detail below. MIPs were introduced for senior management of Westcon International and Logicalis International in FY24. A MIP was introduced for the senior management of the Mason Advisory business in early FY25.	Datatec Group executives and management participate in the Datatec CSP. Executive directors and two other senior managers participate in the DBW. Senior management of Westcon International and Logicalis International participate in their divisional MIPs. The second tier of senior management in Westcon International and Logicalis International participate in SARs programmes. The senior management of Logicalis Latin America has a similar two-tier structure of LTI which is under review in FY25.

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 and some senior management:

• 75% corporate, 25% personal weighting
• Changed slightly for FY24 to 80% corporate and 20% personal weighting because of the addition of a 5% working capital metric for Logicalis LATAM added to the corporate component

Other senior management:

• 50% corporate, 50% personal (with exceptions where appropriate as agreed by the Remuneration Committee) weighting

Shareholder engagement

The Remuneration Committee maintains a programme of shareholder consultation to ensure shareholders’ views on remuneration are considered in the Group’s remuneration policy and implementation practices.

In-person consultations were held with investment managers in December 2023 with Maya Makanjee, Chair of the Board and Deepa Sita, Chair of the Remuneration Committee.

The FY23 remuneration policy was put before shareholders for an advisory vote at the AGM on 27 July 2023 and received support from 93.7% of shares voted (2022: 95.6%).

The FY23 remuneration implementation report was put before shareholders for an advisory vote at the AGM on 27 July 2023 and received support from 84.7% of shares voted (2022: 96.2%).

If the remuneration policy or remuneration implementation is voted against by more than 25% of shareholders, a comprehensive consultation must be undertaken with shareholders in accordance with the King Code and the JSE Listings Requirements.

Other topics of discussion with shareholders during the consultation process included the development of fair and responsible pay reporting and the South African Companies Act amendments currently under consideration and their potential impact on remuneration committees and reporting of remuneration.

Shareholders and the committee both value the consultation process which has been continuing for a number of years now and will continue with further engagement in the next financial year.

Future focus areas

The committee intends to continue the consultation process with shareholders and discuss the continuing evolution of the remuneration policy focusing on ESG and inclusion of environmental metrics in remuneration. The committee will continue to focus its oversight on fair and responsible pay, DE&I and talent management throughout the Datatec Group.

FY25 STI metrics:

The corporate financial goals constitute 80% of the total STI for FY25 (the same structure as FY24). These targets include underlying earnings per share and EBITDA. Also included are cash management / working capital targets with separate metrics for Westcon International, Logicalis International and Logicalis Latin America which match the working capital metrics included in the STI of management of the three divisions.

FY25 STI structure

1) Underlying earnings per share			US cents	Bonus	Weighting
Lower guard-rail		(12)%		40%
On target		Budget		100%	35%
Upper guard-rail		12%		160%

2) Adjusted EBITDA			US$ million	Bonus	Weighting
Lower guard-rail		(14)%		40%
On target		Budget		100%	30%
Upper guard-rail		14%		160%

3a) Westcon working capital – net working capital days			Days	Bonus	Weighting
Lower guard-rail		10%		40%
On target		Target		100%	5%
Upper guard-rail		(10)%		160%

3b) Logicalis International working capital – operating cash conversion			US$ million	Bonus	Weighting
Lower guard-rail		(20)%		40%
On target		Target		100%	5%
Upper guard-rail		20%		160%

3c) Logicalis LATAM working capital – operating cash conversion			US$ million	Bonus	Weighting
Lower guard-rail		(20)%		40%
On target		Target		100%	5%
Upper guard-rail		20%		160%

4) Personal KPIs – CEO and CFO
ESG – predominantly E – environmental – 10%		20%
Reduce structural discount – 10%
Total on-target bonus		100%

The FY25 targets for underlying EPS, adjusted EBITDA and working capital metrics based on budget are not shown as this is commercially sensitive information but will be fully disclosed next year in the implementation section of the FY25 remuneration report.

The personal KPIs agreed by the committee for the executive directors for FY25 are as follows:

ESG – predominantly E – environmental to be assessed by achievement against the Responsible Business development timeline planned achievements for FY25:

1. Datatec net-zero tracking: Report year-on-year improvements or carbon reduction figures in the annual and integrated report as required by SBTi.
2. UN Global Compact communication on progress: Publish the annual communication on progress report (“CoP”) demonstrating Datatec’s commitment to sustainability in labour, human rights, the environment and anti-corruption.
3. EcoVadis: Improve the Datatec sustainability rating on Ecovadis, which evaluates the Group’s environmental, social and ethical practices.
4. TCFD report: Perform a quantitative analysis of the financial impacts of climate-related risks and opportunities on Datatec. The financial analysis will be a central pillar of future TCFD disclosures, enabling stakeholders to assess Datatec’s climate-related resilience better.
5. EU Corporate Sustainability Reporting Directive (“CSRD”) readiness: analyse and plan for the upcoming mandatory CSRD reporting requirements. This proactive approach will ensure Datatec is fully prepared to submit its first CSRD report in 2026, as mandated by the European Union.

Reduce structural discount – initiatives to achieve value generation during FY25 to which the Remuneration Committee will apply a quantitative assessment when evaluating the level of achievement.

FY24 STI achievement

The FY24 STI bonus structure comprised corporate and individual performance targets (KPIs). The outcome is set out in the tables below.

The corporate targets included underlying earnings per share and adjusted EBITDA. Also included are cash management/working capital targets with separate metrics for Westcon International, Logicalis International and Logicalis Latin America which match the working capital metrics included in the STI of management of the three divisions.

The committee assessed achievement against the personal KPI goals as follows:

For the CEO:

• ESG – during FY24, the Group expedited its Responsible Business programme to drive improvements particularly in the environmental and social aspects of ESG. Notable achievements include:
  • ESG Materiality Assessment: A comprehensive assessment was conducted to identify ESG factors impacting our business to ensure our sustainability efforts address the issues that matter most to our stakeholders.
  • SBTi Validation: Datatec's science-based targets were validated by the SBTi, a significant step towards achieving net-zero emissions.
  • UN Global Compact Communication on Progress: Published the first CoP demonstrating Datatec’s commitment to sustainability in labour, human rights, environment and anti-corruption.
  • EcoVadis: Improved Group-wide sustainability rating on EcoVadis, which evaluates the Group’s environmental, social and ethical practices.
  • TCFD report: Published our inaugural TCFD report, outlining the Group's approach to managing climate-related risks and opportunities.

The committee considered that the CEO’s direction and close involvement in championing Responsible Business merits an achievement of 10% for this KPI (target 10%).

• Reduce structural discount – progress on the Strategic Review announced in August 2021 was assessed during FY24. Under this heading, the implementation of MIPs is noted. Confidentiality must necessarily be maintained in relation to other initiatives and the overall assessment of this category was determined to be 10% for this KPI (target 10%).

For the CFO:

• ESG – the CFO’s role in ESG has been to support the CEO in leading the Responsible Business process and the committee concluded an achievement of 10% for this KPI was merited (target 10%).
• Reduce structural discount – the committee assessed that the CFO’s input on the Strategic Review has been highly effective in support of the CEO and therefore the same achievement of 10% (target 10%) for this metric is merited.

1) Underlying earnings per share			US cents	Bonus	Weighting	Outcome
Actual			20.2	158%
Lower guard-rail		-12%	15.9	40%	35.0%	55.3%
On target		Budget	18.1	100%
Upper guard-rail		14%	20.3	160%
2) Adjusted EBITDA			US$ million	Bonus	Weighting	Outcome
Lower guard-rail		-14%	168	40%
Actual			192	94%	30.0%	28.3%
On target		Budget	195	100%
Upper guard-rail		14%	222	160%
3a) Westcon International working capital – net working capital days			Days	Bonus	Weighting	Outcome
Lower guard-rail		10%	20	40%
On target		Target	18	100%	5.0%	8.0%
Upper guard-rail		-10%	16	160%
Actual			10.0	160%
3b) Logicalis International working capital – operating cash conversion			US$ million	Bonus	Weighting	Outcome
Lower guard-rail		-20%	42.8	40%
On target		Target	53.5	100%	5.0%	6.0%
Actual			57.3	121%
Upper guard-rail		20%	64.2	160%
3c) Logicalis LATAM working capital – operating cash conversion			US$ million	Bonus	Weighting	Outcome
Lower guard-rail		-20%	21.3	40%
On target		Target	26.6	100%	5.0%	8.0%
Upper guard-rail		20%	31.9	160%
Actual			49.3	160%
4) Personal KPIs – CEO and CFO					Weighting	Outcome
ESG				10%	20%	20%
Reduce structural discount				10%
Total on-target bonus					100%	126%

The achievement of the targets set out above translated into the following bonus payment for FY24. The executive directors are required to defer a mandatory minimum of 20% of their FY24 bonus into the DBW (the final STI disclosed below includes the mandatory deferral percentage).

Executive director		Base salary (A)	On-target bonus rate (B)	Weighted corporate score (target 80%) (C)	Weighted personal score (target 20%) (D)	Final STI (A x B x (C + D))
Jens Montanana		1 272 000	175%	105.6%	20%	2 795 567
Ivan Dittrich		561 800	95%	105.6%	20%	670 270

The targets and outcomes of the annual bonuses of the executive directors for FY24, shown as a percentage of base salary and split by the bonus elements, are illustrated below.

Please refer to the Remuneration report in the Datatec 2024 annual report for information on non-executive directors’ fees.

Single figure remuneration of executive directors

		CEO		CFO
Component		FY24 US$'000	FY23 US$'000	FY24 US$'000	FY23 US$'000
LTI	CSP	1 764	2 256	623	797
	WI EAP	—	6 600	—	3 300
Total LTI		1 764	8 856	623	4 097
STI	Cash	1 790	1 136	536	300
	Deferred	1 006	473	134	85
Total STI		2 796	1 609	670	385
Pension		214	214	84	84
Benefits		50	49	39	50
Base salary		1 272	1 200	562	530
Guarantee package		1 536	1 463	685	664
		6 096	11 928	1 978	5 146

LTI
CSP
The remuneration from the CSP shown for FY24 is the fair value of the award expected to vest because the performance conditions for the June 2021 CSP grant are expected to be met. Fair value is calculated using the 30-day vwap of Datatec shares as at 28 February in each year.

DBW
The value of the SARs granted by the Company in respect of FY24 and FY23 bonuses deferred by the directors is not included in the single figure remuneration table. The intrinsic value of these SARs will be reported in the single figure remuneration table for the financial year preceding their vesting.

Westcon International EAP
The value of the payment that was due to the executive directors in FY24 from the crystallisation of the Westcon EAP based on the valuation of Westcon at 28 February 2023 is included in their FY23 LTI in the single figure remuneration table.

STI
The STI shown above is split between the element deferred into the DBW and the element paid in cash after publication of the Group results.

Please refer to the Remuneration report in the Datatec 2024 annual report for more information.