Kumba Annual Report 2005

DIRECTORS' REMUNERATION

This report on remuneration and related matters covers issues which are the concern of the board as a whole in addition to those which were dealt with by the remuneration committee.

REMUNERATION POLICY

The human resources and remuneration committee has a clearly defined mandate from the board aimed at:

ensuring that the company’s chairman, directors and senior executives are fairly rewarded for their individual contributions to the company’s overall performance; and
ensuring that the company’s remuneration strategies and packages, including the incentive schemes, are related to performance, suitably competitive and give due regard to the interests of the shareholders and the financial and commercial health of the company.

DIRECTORS’ SERVICE CONTRACTS

All executive directors’ normal contracts are subject to six calendar months’ notice. Non-executive directors are not bound by service contracts.

There are no restraints of trade associated with the contracts.

SUMMARY OF REMUNERATION for the year ended 31 December 2005

								Compen-
					Retire-			sation on
				Benefits	ment	Medical		retirement
			Perfor-	and	fund	fund	Gains	from
	Basic	Fees for	mance	allow-	contri-	contri-	share on	executive
Name	salary	services	bonuses1	ances2	butions	butions	scheme	office	Other	Total
Executive directors	R	R	R	R	R	R	R	R	R	R
Dr CJ Fauconnier	2 927 187		454 144	188 064		21 369			3 278	3 594 042
MJ Kilbride	1 594 384		276 242	344 367	191 547	14 993			2 467	2 424 000
CF Meintjes	1 539 004		249 314	152 477	166 654	15 913			2 365	2 125 727
DJ van Staden	1 557 136		262 778	264 111	182 211	27 745			2 400	2 296 381
RG Wadley³	806 554		113 334	190 773	88 405	7 451		1 358 785	1 288	2 566 590
										13 006 740
Less gains on share scheme
Add share-based payment expense										2 973 434
Total remuneration paid by Kumba										15 980 174
Non-executive directors
PM Baum⁴		165 850		7 215						173 065
BE Davison⁴		133 750		4 950						138 700
TL de Beer		240 750		10 421						251 171
JJ Geldenhuys		230 050		9 599						239 649
Dr D Konar		219 350		6 648						225 998
MLD Marole⁵		87 212		1 480						88 692
AJ Morgan⁶(chairman)		255 017		5 371						260 388
WA Nairn⁴		165 850		5 877						171 727
SA Nkosi		165 850		6 421						172 271
CML Savage		133 750								133 750
Dr NS Segal		176 550		5 206						181 756
F Titi		165 850		5 258						171 108
PL Zim⁴		137 258		4 978						142 236
										2 350 511

1.	All incentive schemes are performance related and were approved by the board. The three-tier incentive scheme includes the incentive linked to the Kumba business improvement programme initiatives and applies to all employees throughout the group.
2.	Include travel and entertainment allowances.
3.	Resigned as executive director on 30 June 2005.
4.	Fees paid to their respective employers and not to them as individuals.
5.	Resigned as a non-executive director and chairman from the Kumba board on 15 April 2005.
6.	Non-executive director who was appointed as non-executive chairman of the board on 15 April 2005.

Retirement amounts paid or receivable by executive directors are paid or received under defined contribution retirement funds.

Directors’ interest in Kumba shares
At 31 December 2005		Beneficial		Non-beneficial
Director	Direct		Indirect	Direct Indirect
Dr CJ Fauconnier	21 880
MJ Kilbride
CF Meintjes
DJ van Staden

PM Baum
BE Davison
TL de Beer
JJ Geldenhuys
Dr D Konar	168
AJ Morgan (chairman)
WA Nairn
SA Nkosi
CML Savage
NS Segal
F Titi
PL Zim

Directors’ interest in Kumba shares
At 31 December 2004		Beneficial		Non-beneficial
Director	Direct		Indirect	Direct Indirect
Dr CJ Fauconnier	21 880
MJ Kilbride
CF Meintjes
DJ van Staden
RG Wadley	47 870

PM Baum
BE Davison
TL de Beer
JJ Geldenhuys
GS Gouws
Dr D Konar	168
MLD Marole (chairman)
AJ Morgan
WA Nairn
SA Nkosi
CML Savage
NS Segal
F Titi
PL Zim

There has been no change to the interest of directors in share capital since the year end.

On 31 December 2005 no director had direct or indirect interests of more than 1% in the share capital of the company.

Directors’ share options and restricted share awards

The following options and rights in shares in the company were outstanding in favour of directors of the company under the company’s share option schemes:

Management share option scheme
For the year ended 31 December 2005

					Pre-tax
				Proceeds if	gain if
				exercisable	exercisable			Sale
	Options			at 31	at 31	Options		price/
	held at 31	Exercise		December	December	exercised	Exercise	market	Pre-tax
	December	price	Exercisable	2005	2005	during	price	price	gain	Date
Name	2005	R	period	R	R	the year	R	R	R	exercised
Executive directors
Dr CJ Fauconnier	307 520	28,05	2008/12/03	31 367 040	22 741 104
	65 440	35,00	2009/11/01	6 674 880	4 384 480
	92 880	41,50	2011/03/16	9 473 760	5 619 240
Total	465 840			47 515 680	32 744 824
MJ Kilbride	35 840	18,74	2010/07/25	3 655 680	2 984 038
	151 320	28,05	2008/12/03	15 434 640	11 190 114
	40 710	35,00	2009/11/01	4 152 420	2 727 570
	50 750	41,50	2011/03/16	5 176 500	3 070 375
Total	278 620			28 419 240	19 972 097
CF Meintjes	20 490	18,50	2009/01/04	2 089 980	1 710 915
	24 890	18,74	2010/07/25	2 538 780	2 072 341
	135 640	28,05	2008/12/03	13 835 280	10 030 578
	35 220	35,00	2009/11/01	3 592 440	2 359 740
	48 040	41,50	2011/03/16	4 900 080	2 906 420
Total	264 280			26 956 560	19 079 994
DJ van Staden	37 080	18,74	2010/07/25	3 782 160	3 087 281
	141 350	28,05	2008/12/03	14 417 700	10 452 833
	35 630	35,00	2009/11/01	3 634 260	2 387 210
	49 730	41,50	2011/03/16	5 072 460	3 008 665
Total	263 790			26 906 580	18 935 989
RG Wadley**	209 280	28,05	2008/12/03
	39 020	35,00	2009/11/01
	44 380	41,50	2011/03/16
Total	292 680

*	Based on a share price of R102,00 which prevailed on 31 December 2005.
**	Options as held on 30 June 2005 when Mr Wadley retired. In terms of the rules of the schemes, all options vest on retirement and must be exercised within three years from retirement. On 18 November 2005 all the options were exercised and the shares sold.

Management share option scheme
For the year ended 31 December 2005

					Pre-tax
				Proceeds if	gain if
				exercisable	exercisable				Sale
	Options			at 31	at 31	Options			price/
	held at 31	Exercise		December	December	exercised	Exercise		market	Pre-tax
	December	price	Exercisable	2004	2004	during		price	price	gain	Date
Name	2004	R	period	R	R	the year		R	R	R	excercised
Executive directors
Dr CJ Fauconnier	307 520	28,05	2008/12/03	13 530 880	4 904 944
	65 440	35,00	2009/11/01	2 879 360	588 960
	92 880	41,50	2011/03/16	4 086 720	232 200
Total	465 840			20 496 960	5 726 104
MJ Kilbride	35 840	18,74	2010/07/25	1 576 960	905 318	23 880		18,74	37,10	438 437	2003/12/03
	151 320	28,05	2008/12/03	6 658 080	2 413 554	64 840		28,05	37,10	586 802	2003/12/03
	40 710	35,00	2009/11/01	1 791 240	366 390
	50 750	41,50	2011/03/16	2 233 000	126 875
Total	278 620			12 259 280	3 812 137	88 720				1 025 239
CF Meintjes	20 490	18,50	2009/01/04	901 560	522 495	5 120		18,50	41,80	119 296	2004/02/19
	24 890	18,74	2010/07/25	1 095 160	628 721	8 290		18,74	44,45	213 136	2004/04/28
						8 290		18,74	41,80	191 167	2004/04/28
	135 640	28,05	2008/12/03	5 968 160	2 163 458	58 120		28,05	37,30	537 610	2003/12/09
	35 220	35,00	2009/11/01	1 549 680	316 980
	48 040	41,50	2011/03/16	2 113 760	120 100
Total	264 280			11 628 320	3 751 754	79 820				1 061 209
DJ van Staden	37 080	18,74	2010/07/25	1 631 520	936 641	7 915		18,74	42,00	184 103	2004/03/01
						1 345		18,74	41,80	31 015	2004/03/01
	141 350	28,05	2008/12/03	6 219 400	2 254 533	20 570		28,05	41,80	282 838	2004/03/01
						40 000		28,05	42,00	558 000	2004/03/01
	35 630	35,00	2009/11/01	1 567 720	320 670
	49 730	41,50	2011/03/16	2 188 120	124 325
Total	263 790			11 606 760	3 636 169	69 830				1 055 956
RG Wadley	209 280	28,05	2008/12/03	9 208 320	3 338 016
	39 020	35,00	2009/11/01	1 716 880	351 180
	44 380	41,50	2011/03/16	1 952 720	110 950
Total	292 680			12 877 920	3 800 146


Management deferred purchase share scheme – Kumba shares
For the 18-months ended 31 December 2004
						Pre-tax
				Proceeds if		gain if
				exercisable	exercisable				Sale
	Options			at 31		at 31	Options		price/
	held at 31	Exercise		December	December		exercised	Exercise	market	Pre-tax
	December	price	Exercisable	2004		2004	during	price	price	gain	Date
Name	2004	R	period	R		R	the year	R	R	R	exercised
Executive directors
Dr CJ Fauconnier
MJ Kilbride							16 780	11,75	37,10	425 373	2003/12/09
CF Meintjes							5 120	18,50	41,80	119 296	2004/02/19
DJ van Staden							20 000	10,00	35,50	510 000	2003/12/18
							15 000	10,00	35,51	382 650	2003/12/18
							16 510	10,00	35,52	421 335	2003/12/18
							10 000	11,75	35,50	237 500	2003/12/19
							27 030	11,75	36,20	660 884	2003/12/19
Total							88 540			2 212 369
RG Wadley							982	8,42	37,20	28 262	2003/12/09
							60 908	8,42	37,10	1 746 841	2003/12/09
Total							61 890			1 775 103