Part 2: Directors’ remuneration policy
This sets out the policy which was approved at the 2023 AGM.
We developed the policy taking into account the principles of the UK Corporate Governance Code, the views of our major shareholders, and pay and conditions of other employees which were considered when the Committee discussed the new policy. The policy is intended to attract, motivate and retain high-calibre directors, to promote the long-term success of Airtel Africa, and to be in line with good practice and the interests of our shareholders. To avoid conflicts of interest, executive directors were not included in discussions on the new policy, and the policy was approved by the Remuneration Committee. The policy will be implemented by the Remuneration Committee.
The policy below is the same as that submitted at the 2023 AGM except for:
- Minor changes to the scenario charts to make them relevant to the CEO and the new CFO
- Minor updates to the section on performance measures and approach to target setting to increase clarity
- Updates to reflect the current non-executive directors’ letters of appointment
Key principles of our remuneration policy
Our committee took into account the UK Corporate Governance Code’s six factors in Provision 40 in determining the remuneration policy. We believe the policy addresses these factors:
- Clarity: the structure of remuneration is designed to support our company strategy, aligning the interests of our executive directors with those of our shareholders.
- Simplicity: We operate a simple remuneration framework, comprising fixed pay, short- and long-term incentives. The use of both performance and restricted shares may add a little complexity, but this is appropriate and critical to our talent agenda for the markets in which we operate.
- Proportionality: remuneration is set at competitive levels to ensure our ability to attract and retain premium talent. There is a direct link between the success of the strategy and the value received by executive directors.
- Alignment to culture: the remuneration approach supports our strategy objectives and reflects the diversity of our business. The structure of the package, and benefits in particular, reflects local practices and employment conditions in the countries in which executive directors are based and/or recruited from.
- Predictability: a significant proportion of executive directors’ remuneration should be performance based. The policy sets out the possible future value of remuneration executive directors can receive.
- Risk: the package is appropriately balanced between the achievement of short-term and longer-term objectives and does not reward poor performance or encourage inappropriate risk-taking.
Executive directors’ remuneration policy table
Purpose and link to strategy | How we assess performance | Maximum | |
|---|---|---|---|
Base salary | To recruit and reward executive directors of a suitable calibre for the role and duties required | Normally reviewed annually by committee, taking account of company and individual performance, changes in responsibility and levels of increase for the broader employee population. Reference is also made to market levels in companies of similar size and complexity. We consider the impact of any base salary increase on the total remuneration package. Salaries (and other elements of the remuneration package) may be paid in different currencies as appropriate to reflect the geographic location. | There is no prescribed maximum salary or annual increase. However, increases will generally be guided by increases for the broader employee population. Increases above this level may be made in specific situations to recognise development in the role, changes responsibility, material changes to the business or exceptional company performance. |
Benefits and pension | To provide market competitive benefits | Benefits for executive directors will typically reflect their country of residence. Where an executive director receives an expatriate package, additional cash benefits may be provided. Expatriate benefits may include housing allowance, education allowance and home leave tickets. Car allowances, life and medical insurance may also be provided. Statutory benefits as required under local law of the host country will also be paid. Pensions may be provided where this is in line with the workforce provision and statutory requirements in the executive’s home location. We may also equalise for double taxation between the required work location and the executive’s country of residence if required. | Maximum values are determined by reference to market practice, avoiding paying more than is necessary. Where pension is offered, this will be in line with statutory requirements in the executive’s home location and in line with the wider workforce for that location. |
Bonus plan | To incentivise and reward annual performance achievements. To also provide sustained alignment with shareholders through a component deferred in shares | Awards are based on annual performance against a scorecard of metrics aligned with our strategy, KPIs and other yearly goals. Financial measures have the highest weighting. Performance against strategic financial and non-financial objectives may also be used but will not normally account for more than 20% of the total. The policy gives the committee the authority to select suitable performance metrics aligned to our strategy and shareholders’ interests, and to assess the performance outcome. One-third of any bonus is normally delivered in shares deferred for a further two years. Any dividend equivalents accruing on shares between the date when the awards were granted and when the awards vest will normally be delivered in shares. Malus and clawback provisions apply to both the cash and share-based element of awards for a period of two years from the date of payment (cash) or date of release (shares) if there is:
| The maximum annual bonus is 200% of base salary for the CEO, and 175% for other executive directors. The committee will use its discretion within these limits to consider the maximum bonus opportunity each year, taking account of market development opportunities, specific events and role expansion. Threshold performance results in a payment of 30% of maximum. Dividend or dividend equivalents may be earned on the deferred bonus component. Change from previous policy: Reduction in policy maximum from 200% to 175% of base salary for other executive directors. |
Long-term Incentive plan (LTIP) | To incentivise and reward the delivery of the company’s strategic objectives and provide further alignment with shareholders through the use of shares | Awards may comprise performance shares (PSP) and/or restricted stock units (RSUs). Individuals are considered each year for an award of shares that normally vest after three years to the extent that any performance conditions are met and in line with the terms of the shareholder-approved plan. PSP awards are made subject to continued employment and the satisfaction of stretching performance conditions normally measured over three years set by the committee before each grant. The committee will have discretion to change the metrics and weighting from year to year. Major shareholders will normally be consulted before any significant changes. Awards of RSUS depend on continued employment and a financial underpinning set by the committee before each grant. The LTIP vesting outcome can be reduced, if necessary, to reflect the underlying or general performance of Airtel Africa. A two-year post-vesting holding period also normally applies to LTIP awards that vest (net of tax) after the adoption of this policy. Any dividend equivalents will normally be delivered at the end of the vesting period in shares based on the proportion of the award that vests. Malus and clawback provisions apply to awards made for three years from the date on which the award vest when there has been:
| The maximum annual grant limit is 300% of base salary (face value of shares at grant) for the CEO and 250% of base salary for other executive directors. No more than 50% of base salary may be granted as RSUs to any one person in a single year. A maximum of 25% of the PSP award is available for threshold performance, rising to 100% of the grant for performance at the stretch level. In accordance with the LTIP plan rules, dividend or dividend equivalents may be earned on vested shares. Change from previous policy: Increase in LTIP award level from 200% of base salary to 300% of base salary for the CEO and to 250% of base salary for other executive directors. New cap on RSU award level of 50% of base salary. |
One-off award for exceptional strategic initiatives | To incentivise, in exceptional circumstances, the achievement of strategic initiatives | An award of cash or equity linked to the achievement of an exceptional strategic initiative. Awards would be subject to performance measures linked to the strategic initiative. The performance period would be aligned to the achievement of the strategic initiative, or a specific milestone. Malus and clawback provisions apply to awards made for three years from the date on which the award vest when there has been:
| Maximum annual award level of 100% of base salary (face value of equity award at grant, or maximum value of cash award). Where a threshold target is set, the minimum amount payable would normally be 25% of the award. Change from previous policy: New element of remuneration. |
Share ownership policy | To further align the interests of executive directors with those of shareholders | In-employment The CEO is expected to build up and retain shares worth 250% of base salary within five years of being appointed to the Board. Other executive directors are expected to build up and retain shares worth 200% of base salary within the same timescale. Post-employment Executive directors are required to retain shares equal in value to the lower of their holding on the date of cessation or 50% of their in-employment requirement for two years. Only shares acquired from LTIP and deferred bonus awards granted after their appointment to the Board will count towards this requirement. | Not applicable |
Discretion in operating the incentive plans
To make sure these plans are operated and administered efficiently, the committee has discretion in relation to a number of areas. Consistent with the marketplace, these include (but are not limited to):
- Selecting the participants
- The timing of grant and/or payment
- The size of grants and /or payments (within the limits set out in the policy table)
- The extent and timing of vesting based on the assessment of performance
- Determining a ‘good leaver’ and, where relevant, the extent of vesting for share-based plans
- Treatment in exceptional circumstances such as change of control, when the committee would act in the best interests of our business and its shareholders
- Making the adjustments required in certain circumstances (such as right issues, corporate restructuring, variation of capital and special dividends)
- The form of settlement of awards in accordance with the discretions set out in the plan rules
- The annual review of performance measures, weightings and targets for the discretionary incentive plans from year to year
- The interpretation and operation of requirements related to the holding of shares in Airtel Africa
The committee has the right to amend or substitute any performance conditions if something occurs that would stop the condition from achieving its original purpose. Any amended condition would not be materially easier to satisfy in the circumstances.
Choice of performance measures and approach to target setting
Targets for each year’s annual incentive and long-term incentive award are determined by the committee, and, if relevant, any one-off award for exceptional strategic initiatives, taking a range of factors into account. Financial goals include the annual budget, the relevant three-year strategic plan, analysts’ consensus factors, wider economic facts and affordability for the business. Non-financial goals reflect the priorities of our business and responsibilities of the role.
The annual bonus is based on performance against a stretching combination of financial and non-financial performance measures aligned with our KPIs and operational goals for the year. As such, they typically include measures of revenue, profitability and cash flow, which reflect our focus on profitable growth, cash generation and satisfying our debt and other capital commitments. Executive directors and members of our senior management team are also assessed on personal objectives, as agreed by our committee at the start of each year. The committee reviews and adapts the objectives each year as appropriate to reflect the priorities for the business in the year ahead.
The committee sets a sliding scale of targets for each financial measure to encourage continuous improvement and to stretch performance. The policy gives the committee the authority to select suitable performance metrics aligned to our strategy and shareholder interest.
The performance conditions for the PSP and the underpin for the RSUs are based on measures which are key indicators of our growth, financial health and are aligned with our shareholders’ interests. The committee sets a sliding scale of challenging performance targets for each measure for the PSP – see more on these PSP targets. The committee reviews the choice of performance measures and the appropriateness of the performance targets and TSR peer group, when relevant, before each PSP grant. While different performance measures and/or weightings may be applied for awards in different years, the committee will consult with major shareholders before making any significant changes.
The performance conditions for any one-off awards for strategic initiatives would be linked to the successful delivery of the strategic initiative and the creation of value for Airtel Africa shareholders. The performance targets would be tailored to the specific strategic objective, but would be set so that: (a) the maximum award would be only payable for achieving a stretching level of performance, and (b) the delivery of a “target” level of performance would result in around 50% of the maximum award becoming payable.
Legacy arrangements
Airtel Africa has the authority to honour any commitments entered into with current or former directors before this policy is approved or before their appointment to the Board. Details of any such payments will be set out in the remuneration report for the relevant year.
Executive directors’ existing service contracts
Our executive directors can enter into agreements with a fixed or indefinite term that may be terminated by either party on three months’ written notice. At the committee’s discretion, we may make a payment in lieu of notice – this is calculated relative to base salary and benefits only, paid on a phased basis and subject to mitigation.
Entitlement to both annual bonus and LTIP awards will typically lapse on cessation. In good leaver circumstances pro-rata bonuses may be paid and LTIP awards may vest in line with our policy and the plan rules. If a director commits an act of gross misconduct or similar, they may be dismissed without notice and without further payment or compensation, except for sums accrued up to the leaving date.
Name of director | Date of service contract | Unexpired term* |
|---|---|---|
*As at date of service contract | ||
Sunil Taldar | 1 July 2024 | 10 years |
Jaideep Paul | 1 June 2021 | 10 years |
Approach to remuneration for the new executive directors
The remuneration package for a newly appointed executive director will be set in line with the remuneration policy in force at the time. Variable remuneration will be determined in the same way as for existing executive directors, and is subject to the maximum limits on variable pay referred to in the policy table.
The committee may also buy out any remuneration and contract features that an executive director may be giving up in order to become an executive director of Airtel Africa. Such buyouts would take into account the nature of awards forfeited and would reflect (as far as possible) performance conditions, the value foregone and the time over which they would have vested or been paid. Where shares are used, these awards may be made under the terms of the LTIP or under a separate arrangement as permitted under UK Listing Rules.
The committee may agree that certain relocation, legal, tax equalisation and other incidental expenses will be met as appropriate.
For an internal appointment, any legacy arrangements related to the previous role will be allowed to pay out as per their original terms unless they are bought out by the company, even if these are in conflict with the policy in place at the time.
Service contracts for new executive directors and policy on loss of office
Contracts for new executive directors will normally include up to six months’ notice by either party. This table summarises how the main elements of pay will normally be treated.
Good leaver | Other leavers | Dismissal for cause | |
|---|---|---|---|
Base salary | Payable for unexpired portion of notice period or settled by making a cash payment in lieu | Nil | |
Benefits and pension | Continues to be provided for unexpired portion of notice period or settled in cash | Nil | |
Annual bonus | Paid for period worked and subject to the normal performance conditions Paid following the relevant year end in cash | Normally lapse | Lapse |
Deferred bonus awards | Typically vest on normal timetable without pro-rating for time | Normally lapse | Lapse |
Share-based awards | Typically vest according to normal schedule subject to performance conditions (if applicable) and usually pro-rated for time | Normally lapse | Lapse |
The committee would try to mitigate any payments in lieu of notice by, for example, making payments in instalments that can be reduced or ended if the former director wants to begin alternative employment during the payment period. We will pay as necessary any statutory entitlements or sums to settle or compromise claims in connection with a termination (including, at the discretion of the committee, reimbursement for legal advice and provision of outplacement services).
On a change of control of Airtel Africa, outstanding awards will normally vest early to the extent that the performance conditions have been satisfied. Awards would normally be reduced pro-rata to reflect the time between the grant date and the date of the corporate event.
If there is a demerger, special dividend or other event the committee thinks may affect the current or future value of shares, they may decide that awards will vest on the same basis as on a change of control. If there is an internal corporate reorganisation, awards will be replaced by equivalent new awards over shares in a new holding company, unless the committee decides that awards should vest on the same basis on a change of control.
Remuneration scenarios at different performance levels
These charts illustrate the total potential remuneration for the CEO and new CFO at three performance levels.
Remuneration scenarios ($000)
Chief Executive Officer
Chief Financial Officer
Fixed pay
Annual bonus
Long-term incentives
One-off strategic award
1 Assumptions:
Minimum = fixed pay only (salary + benefits + pension)
On target = 50% vesting of maximum bonus, 75% for the one-off strategic award and 55% for PSP awards, 100% for RSUs
Maximum = 100% vesting of maximum bonus, one-off strategic award and LTIP awards.
2 Salary levels (on which other elements of the package are calculated) are based on those applying on 1 April 2025 for the new CFO and on 1 June 2025 for the CEO and incentive levels are based on the implementation levels for 2025/26.
3 Benefit values exclude the costs of business travel and accommodation.
4 To reflect the impact of a share price increase in Airtel Africa plc shares between award and vesting, the LTIP value in the maximum column has been increased by 50% in the share price growth column.
5 The outgoing CFO has not been included in the above charts as his departure has been announced and he will not be in role for a full year. A description of the treatment of his remuneration on departure can be found later in this report.
Remuneration policy for non-executive directors
Element | Purpose and link to strategy | Operation | Maximum opportunity |
|---|---|---|---|
Non-executive Board chair fees | To attract and retain high-calibre chairs with the necessary experience and skills. To provide fees that reflect the time commitment and responsibilities of the role. | The chair receives an annual fee, plus a fee for chairing the Nominations Committee. We may also pay fees reflecting additional time commitments or time required to travel to Board meetings. The chair may also be provided with a company car as long as he meets the full cost of this benefit out of his fee. | The committee reviews chairs’ fee periodically. While there is no maximum fee level, we set fees by reference to market data for companies of similar size and complexity. |
Other non-executive fees | To attract and retain high-calibre non-executive directors with the necessary experience and skills. To provide fees that reflect the time commitment and responsibilities of the role. | Non-executive directors are paid a basic fee. We may also pay additional fees to reflect extra responsibilities or time commitments, for example, for Board committee chairs, senior independent directors or designated non-executive directors, or time required to travel to Board meetings. | Non-executive directors’ fees are reviewed periodically by the chair and executive directors. While there is no maximum fee level, fees are set by reference to market data for companies of similar size and complexity. |
We may reimburse the reasonable expenses of directors that relate to their duties for Airtel Africa (including tax if applicable). We may also provide advice and assistance with directors’ tax returns where these are affected by their duties on our behalf.
All non-executive directors have letters of appointment for an initial period of three years. In keeping with best practice, non-executive directors are subject to re-election each year at our AGM. The chair’s appointment may be terminated be either party with six months’ notice, and the appointments of the other non-executive directors may be terminated by either party with one month’s notice. Either appointment can also be terminated at any time if the director is removed by resolution at an AGM or pursuant to the Articles.
Directors’ letters of appointment are available for inspection during normal business hours at our registered office and also at our yearly AGM. A table setting out the unexpired terms of their contracts is set out below and is updated annually to be accurate at the financial year end of the current reporting year.
Director | Unexpired term | Will renew for three-year term |
|---|---|---|
Sunil Bharti Mittal | 2 years, 7 months and 26 days |
|
Akhil Gupta | 2 years, 6 months and 23 days | Will retire at the 2025 AGM |
Shravin Bharti Mittal | 2 years, 6 months and 23 days |
|
Andy J Green | 3 years |
|
Awuneba Ajumogobia | 3 years |
|
Ravi Rajagopal | 3 years |
|
Annika Poutiainen | 3 years |
|
Tsega Gebreyes | 2 years, 6 months and 12 days |
|
Gopal Vittal | 2 years, 6 months and 28 days |
|
Cynthia Gordon | 3 years |
|
Paul Arkwright | 2 years, 1 month and 8 days |
|
Shareholder context
The committee considers the views of shareholders when reviewing the remuneration of executive directors and other senior executives. We consult directly with major shareholders about any material changes to the policy and work with shareholders to understand any concerns. For example, the committee consulted with major shareholders on changes to this policy during the development of this proposed policy.
Broader employee context
The committee considers executive remuneration in the context of our wider employee population. Remuneration for executive directors is more weighted towards variable pay than for other employees so that more of their pay is conditional on the successful delivery of business strategy. Our aim is to create a clear link between the value created for shareholders and the remuneration of our executive directors.
Airtel engages with employees on a number of issues, including remuneration, in a variety of ways. For example, the designated non-executive director for employee engagement holds regular meetings with employees when he visits sites throughout the year, and Board members when they visit markets during any year hold engagement sessions with the workforce. Through these meetings and engagement, our board members inform employees on executive remuneration and receive feedback. This engagement approach is kept under review as we continually seek to improve the Board’s dialogue with employees.
This year we introduced our new Employee Connect initiative. Our independent non-executive directors met virtually with colleagues enabling conversations that provided employees with another way to share their ideas and concerns directly with directors and enabled our Board members to update the Board directly on matters raised, including remuneration and benefits. Read more about Employee Connect.