Wrap Text
Update on Liberty’s senior management long-term incentive awards in the context of the COVID-19 crisis
LIBERTY HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number 1968/002095/06
("Liberty Holdings")
Alpha Code LBH
ISIN code: ZAE000127148
UPDATE ON LIBERTY’S SENIOR MANAGEMENT LONG-TERM INCENTIVE AWARDS IN THE
CONTEXT OF THE COVID-19 CRISIS
The COVID-19 pandemic and associated economic crisis has radically changed the environment in which
we work, the way we work, and the way we serve our clients. The global pandemic event has been
characterised as a one in one-hundred-year stress event, and has drastically affected almost all parts of
South African society. In this context, Liberty faces an unprecedented set of circumstances in which the
interests of clients, shareholders and all other stakeholders need to be protected, and promoted as best as
possible.
The role of Liberty’s remuneration committee (Remco) is to ensure that Liberty’s remuneration policies are
fair and responsible, and that there is alignment between stakeholder and employee interests, in this new
environment.
Remco believes that the implementation of its policies must incentivise delivery of the group's strategy and
creation of value for the benefit of customers, shareholders and all other stakeholders, in the short, medium
and long term. This is a particularly important goal during this period of ongoing uncertainty.
Remco has evaluated the effectiveness of Liberty’s Long Term Incentive (LTI) schemes which are no
longer achieving the goals laid out above. In particular, it is clear that Liberty’s recently introduced
Performance Reward Plan (PRP) scheme, the March 2020 vintage of which was awarded three weeks
before the commencement of the pandemic lockdowns in South Africa, provides very little alignment of the
incentivisation of executives with interests of all stakeholders. The financial conditions attached to the PRP
scheme simply did not contemplate the severity of the effects of the pandemic.
The executive leadership team have a critical role to play in providing the energy and leadership for Liberty
to cope with the current crisis. Looking beyond the pandemic, the Board is confident that the leadership
team provides Liberty with the ability to create superior long-term value for both clients and shareholders
and is making meaningful progress in re-setting Liberty’s competitive position to achieve this. Remco
believes that, for the long term prospects of Liberty, it is crucial that they are retained and motivated in a
manner that is clearly aligned with all stakeholders.
Given the extreme fluidity of the current environment and the low levels of predictability of financial
performance, Remco believes that the LTI awards awarded on 1 March 2020 to approximately 40 senior
management individuals, under the Performance Reward Plan (PRP), would be more effective if
implemented under the Equity Growth scheme (EGS), through a contractual process of voluntary
cancellation and acceptance (“2020 Special EGS awards”).
Given the need for management to focus on the delivery of Liberty’s strategy for all stakeholders through
the 2020 crisis and into its recovery, the 2020 Special EGS awards will carry the following conditionality:
1. Individual performance: awardees must achieve a "fully achieved" rating for their own personal
KPI’s, across each year between award and vesting.
2. Firm wide performance conditions:
a. In the opinion of Remco, Liberty must have made substantial progress in respect of the 5
value drivers used to guide and monitor the execution of the strategy:
i. Client and Adviser experience
ii. Employee experience
iii. Risk and conduct
iv. Social, environmental and the economy
v. Financial performance
b. Progress will be assessed by Remco at the three year anniversary of the award and
vesting will be in the sole discretion of Remco.
c. Remco’s assessment of vesting will be applied to all three vesting tranches.
d. Remco may, in its discretion, approve proportional vesting should the assessment of
progress merit such.
With regard to pre-2020 LTI awards, Remco concluded that it would not consider any changes to the
financial performance conditions attached to those awards.
GRANT TO, AND ACCEPTANCE BY, EXECUTIVE DIRECTORS OF SHARE AWARDS
In compliance with paragraphs 3.63 to 3.74 of the JSE Limited Listings Requirements, Liberty Holdings
hereby announces that the following executive directors of the Company have been awarded, and
accepted, conditional awards in terms of a Special award of rights under the Liberty Equity Growth scheme
(EGS) through a voluntary cancelation and acceptance process in respect of the March 2020 awards of the
Liberty Holdings Performance Reward Plan (PRP).
Awards in the EGS are settled in ordinary shares upon vesting, subject to the outcome of the conditions
imposed.
The conditional EGS rights awarded are subject to retention, forfeiture and performance conditions and
vest in accordance with the rules of the EGS.
The March 2020 LTI award for Mr Munro, the chief executive officer of Liberty Holdings Limited, which was
a PRP award to the value of R13,5 mil has, through a process of voluntary cancelation and acceptance,
become a Special EGS award to the same value.
Number of Rights 828,000 (based on a valuation per right of R16.31)
Reference price per share
at award date: R55,85
Class of security Awards in respect of participation rights
Date of Acceptance 7 November 2020
Vesting date 50% on 6 November 2023, 25% on 6 November 2024 and 25% on
6 November 2025
Nature of Transaction Off-market award and acceptance of share awards
Nature and Extent of interest Direct beneficial
Clearance obtained Yes
The March 2020 LTI award for Mr Maharaj, the chief financial officer of Liberty Holdings Limited, which was
a PRP award to the value of R6,5 mil has, through a processs of voluntary cancelation and acceptance,
become a Special EGS award to the same value.
Number of Rights 399,000 (based on a valuation per right of R16.31)
Reference price per share
at award date: R55,85
Class of security Awards in respect of participation rights
Date of Acceptance 7 November 2020
Vesting date 50% on 6 November 2023, 25% on 6 November 2024 and 25% on
6 November 2025
Nature of Transaction Off-market award and acceptance of share awards
Nature and Extent of interest Direct beneficial
Clearance obtained Yes
Queries:
Investor Relations
Sharon Steyn
Email: sharon.steyn@liberty.co.za
9 November 2020
Sponsor
Merrill Lynch South Africa (Pty) Limited
Date: 09-11-2020 08:00:00
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