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REMUNERATION REPORT
Remuneration report
continued
86
Tiger Brands Limited Integrated Annual Report
2014
immediately prior to the grant date of the
option. From 2011 onwards, the method of
determination of the grant price was changed
from the 30-day average closing share price
prior to the date of the option grant to the
10-day volume weighted average price
(VWAP) prior to the grant date. The use of a
10-day VWAP price smooths out any volatility
in the share price in the period immediately
leading up to the grant date. The cash
settlement amount of the option is equal to the
difference between the closing market price of
a Tiger Brands share on the date on which the
option is exercised and the grant price.
Tiger Brands Limited 2013 Share Plan
The Tiger Brands Limited 2013 Share Plan,
which was implemented in February 2013, is
in line with global best practice and emerging
South African practice, as it gives recognition
to the required attributes of shareholder
alignment, retention of key talent and long-term
sustained performance.
The purpose of the 2013 Share Plan is to
attract, retain, motivate and reward those
executives and managers who are able to
influence the performance of Tiger Brands and
its subsidiaries on a basis which aligns their
interests with those of the company’s
shareholders.
Under the 2013 Share Plan, executives and
selected managers of the company and its
subsidiaries will be offered, on an annual
Subject to meeting certain minimum
performance conditions in respect of 50% of
the options granted, all options granted from
2009 to 2013 are exercisable in equal
one-third tranches on each of the third, fourth
and fifth anniversary dates of the date of the
original grant. The performance vesting
condition in respect of 50% of the options
granted requires that the company’s HEPS
increases by a minimum of 3% per annum
above inflation, on a rolling cumulative basis,
over the relevant three, four and five-year
performance periods. If the minimum financial
hurdle rate is not achieved, annual retesting
of the performance condition is permitted up
to the sixth anniversary of the date of original
grant in respect of the options granted in
2009 and 2010. It is to be noted that all the
cash-settled options granted in 2009 have
fully vested as at 30 September 2014.
For phantom cash options issued from 2011
onwards, and in line with the principles of
King III, annual retesting of the performance
condition is not permitted. These options are
subject to a sliding vesting scale (based on
varying levels of real growth in HEPS) which is
applied on the third, fourth and fifth anniversary
dates of the original grant date of the options,
in respect of each one-third tranche,
respectively.
The grant price of the cash-settled options
awarded in 2009 and 2010 is equal to the
average closing market price of a Tiger Brands
share on the JSE for the 30 trading days