Remuneration report

CA&S Group (CA&S or the group) is a holding company with almost 70% of its total assets represented by independently managed unlisted investments, each with its own remuneration policy designed specifically for its business and the industry in which it operates. An investment holding company is distinctly different from an operational company.

As an investment holding company, CA&S has limited day-to-day operations, and its primary focus is to assist its investments to grow and produce long-term value creation for its shareholders. The remuneration policy aims therefore to be conducive to driving long-term decision-making to achieve the group’s objectives.

In addition to achieving sustainable topline growth, the key metrics for the group are earnings and headline earnings per share. For the year under review, revenue and operating profit grew by 2.3% and 10.0% respectively, whilst EPS and HEPS increased by 13.4% and 17.1%, respectively. The growth experienced by the company enabled it to increase its dividend by 17.4% to 28.69 cents per share. On the JSE, the CA&S group share price traded at a high of R19.60 per share during the year, but ended the year at R14.84, which was 8.4% below the closing price of 2024.

Our strategy remains focused on growth with existing clients through the introduction of new services and expansion into new geographical markets coupled with channel broadening. What will however leapfrog us to the stretched target of R20 billion revenue, is the acquisition of sizeable businesses in new geographies.

Our current long-term incentive (LTI) scheme was introduced in 2018, with issued shares to settle share options limited to 1% of authorised ordinary shares. We are satisfied that we have achieved our key objective of incentivising strong performance and presenting a market-competitive reward structure which enables us to retain and attract the talent we require to continue to drive our strategy forward, with a minimal amount of dilution to our shareholders. The LTI scheme ensures that executives of the group are exposed to share price growth through their participation in the LTI scheme.

The short-term incentive (STI) provided a key focus on earnings growth in the business. Executives also participate in this incentive. It is, however, the sole incentive for senior management, other than executives. We are comfortable that the STI focus remains appropriate, and the STI delivers outcomes which are aligned with our “pay for performance” principle, supporting the shareholder growth trajectory.

Our approach is to focus our STI on our key financial metric – being our headline earnings per share growth, and we have endeavoured to set realistic but stretched targets relating to this measure. This task is not always easy, as the macroeconomic environment and unexpected circumstances may alter what may be considered to be “strong” or even “exceptional” performance. The key metric for strategic and senior management of the operations is the operational profit after tax growth. Senior executives of the operations are measured on both the group’s headline earnings per share growth as well as their individual operation’s profit after tax growth. In addition to the financial metric, are non-financial individual KPIs that need to be achieved.

It is vital that progress against set targets is closely monitored to ensure that the remuneration policy is able to achieve its desired objectives, while remaining fair to all stakeholders.

We are grateful for our shareholder feedback in this regard as it provides meaningful insights into our considerations.

As a Remcom, we ultimately aim to make decisions and change policy in a way which we feel will most serve the company and all its stakeholders in the long term. We experienced strong performance during the period 2021 to 2025, resulting in significant STI pay-outs delivering appropriately competitive bonuses to reward employees who were key to this achievement. Similarly, since our listing on the JSE Limited, our share options delivered value to our executives, which aligned with the returns delivered to shareholders over this period.

Refer to the graph below that showcases the LTI single-figure outcome for the CEO relative to total shareholder return (TSR) delivered for CA&S’ shareholders for the period 2021 to 2025.