Report of the
remuneration committee
“The committee’s
principal
function is to
determine,
on behalf of
the board,
the senior
executive
remuneration
policy and
the
remuneration
as well as
other terms
and
conditions
of employment
of the company’s
executive
directors.”
The remuneration committee comprises two independent non-executive
directors:
Members
Appointed
RI Israel (Chairman)
15 July
1997
BH Asher
15 July
1997
During the year, the committee met six times and its members
discussed all aspects of the remuneration of the group. For the year
under review, and purely as payment for his services as chairman of
the remuneration committee, Mr Israel was paid US$40 000. Mr Asher
was paid a fee for his role as the senior independent non-executive
director and he was not paid an additional fee for services to any
board committee. Details of the fees paid to Mr Asher are contained
REMUNERATION POLICY
The committee’s principal function is to determine, on behalf of the
board, the senior executive remuneration policy and the remuneration
as well as other terms and conditions of employment of the company’s
executive directors. The company’s human resources executive
provides the committee with access to comparative industry surveys
which assist in formulating remuneration.
The committee believes that it should be able to meet without the
attendance of management. In addition, the members are entitled
to call for independent consultants’ advice on pertinent issues. During
the year the committee employed the services of Bachelder & Dowling
to review executive remuneration. This was done in conjunction with
reviews of various mining related industry surveys. The consultant
provides no other services to the company. At certain meetings, the
committee members invite the chairman and chief executive officer
to attend.
The committee has recommended a new remuneration charter which
has to be approved by the board and, once adopted, will be placed
on the company’s website.
The committee’s objective is to provide senior management, including
directors, with a competitive package which will attract and retain
executives of the highest calibre and encourage and reward superior
performance. Further, the committee is cognisant that the market
demands that criteria be established which measure an individual’s
performance. The committee agreed performance criteria with the
executive directors and an appraisal was completed and performance
measured against the agreed criteria. The committee believes that
the bonus payments, which are linked to the performance of the
company’s share price, together with participation in the company’s
share option scheme and share grants for the CEO are sufficient to
motivate executives and align their interests with those of shareholders.
As a result of an investigation into the correct method of incentivising
the CEO and to motivate his performance and to align him with the
interests of shareholders it was decided that the CEO should no longer
participate in the share option scheme but rather receive an award
of shares which would only be granted upon the achievement of
agreed performance criteria.
EXECUTIVE DIRECTORS
The remuneration of the executive directors comprises a basic salary,
an annual bonus, participation in the share option scheme for the
36 Annual
Report 2005 Randgold Resources
