human capital and remuneration report

REMUNERATION

The group’s remuneration policy should be read in conjunction with this report.

Staff remuneration

Staff remuneration comprises a base salary, performance-linked incentives or a 13th cheque, retirement and healthcare funding and store discounts.

Remuneration practices support the group’s decentralised business model. Operational staff are remunerated on performance and earn a basic salary and incentives.

An annual bonus is paid to permanent employees who do not participate in incentive performance schemes.

Salaries are reviewed annually and the level of increase is based on group and individual performance. Lewis Group has a recognition agreement with the South African Commercial and Allied Workers’ Union (SACCAWU). All employees forming part of the South African-based collective bargaining unit received the negotiated wage increase.

Employee benefits

• Retirement: Membership of one of the group’s retirement funds is compulsory for all permanent staff. Employee retirement benefits are detailed in note 13 of the annual financial statements.
• Healthcare: Membership of the group’s designated healthcare schemes is subsidised.
• Other staff benefits include educational bursaries, discounts on staff purchases and low-cost funeral and personal accident insurance.

Executive remuneration

The remuneration of the group’s executive directors are set out in note 17.4 of the annual financial statements.

Annual bonuses are payable in June each year following the approval of the group’s financial results for the preceding financial year.

The total remuneration paid to the directors of Lewis Stores (Proprietary) Limited is disclosed in note 17.5 of the annual financial statements, in line with the requirement to disclose the remuneration of the most highly paid employees who are not directors of the company.

Share incentive schemes

Share-based incentives are set out in note 17.3 of the annual financial statements.

Awards are made annually in June. Special awards can be made when the Remuneration Committee deems it appropriate in the circumstances.

Targets are set by the board and Remuneration Committee at the point the budget is approved, which is usually in March.

Awards will only be paid if the participant is in the employ of the group at the time of vesting, other than in the event of death, ill health, retirement or retrenchment.

Non-executive directors’ remuneration

Fees paid to the non-executive directors for the 2011 reporting period are outlined in note 17.4 of the annual financial statements. The proposed fees for the period 1 April 2011 to 30 June 2012 are set out in the Notice of Annual General Meeting. The fees cover a 15-month period to align the approval and payment cycles with that of the annual general meeting.

SKILLS DEVELOPMENT

An extensive range of training courses is offered to all employees to enhance their performance and skills. During the 2011 financial year, 3 096 staff attended training and development courses, an increase of 18% over the previous year.

Black staff accounted for 84% of the total employees trained.

Several of the courses are aimed at developing scarce skills relevant to the retail sector, focusing on sales, stock management, credit control and the development of managerial skills.

The group’s training department is accredited with the Wholesale and Retail Sector Education and Training Authority and offers a range of e-learning programmes.

employment equity

Management is committed to ensuring that the group’s employee profile is representative of the customer base it serves and the communities in which Lewis trades. Black staff now account for 89% of the staff complement, with women comprising 55%.

An employment equity plan focuses on increasing the representation of designated groups, mainly in the senior management, professionally qualified and skilled technical areas. Strategies have been developed to achieve internal employment equity targets, including the implementation of a comprehensive learning and development plan, in-service training of retail management students, granting bursaries, job profiling and performance assessments. Management monitors the group’s performance against these targets to ensure employment equity is promoted across the business.

The employment equity profile of the workforce in South Africa at 31 March 2011 is as set out in the table below.

OCCUPATIONAL HEALTH AND SAFETY

Lewis aims to create and maintain a healthy and safe work environment. Safety management is incorporated into business practices to ensure accidents and incidents are minimised.

The Health and Safety Steering Committee monitors adherence to health and safety standards, as well as legislative and regulatory compliance. The Health and Safety Steering Committee reviews risks and reports to the Executive Committee on a regular basis. The internal audit department monitors compliance with the health and safety policy.

HIV/AIDS MANAGEMENT

An HIV/AIDS awareness programme is incorporated into the regular staff training programmes. Staff are informed of the effects of the disease and means to prevent infection.

An HIV/AIDS management programme run by an external service provider is available to permanent staff and their immediate families. The group covers the cost of this programme. The programme offers access to post-HIV exposure counselling through a care centre and covers initial medication, free consultations and assistance in locating a clinic for treatment. Participation is voluntary and counselling is confidential.