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Where bonuses are paid, the following example illustrates the calculation methodology:
How a bonus is calculated
1. Three elements are used as inputs to a bonus
calculation, namely Company performance
(CP), team performance (TP) and employee
performance (EP). Each element has a
weighting (a), with all elements adding up to
100%.
2. Targets for each element are set at the
beginning of the performance cycle and
measured at the end of the performance
cycle where a corresponding “nominal % (b)”
is determined from a standard translation
table.
3. Company performance as a “qualifier” for
bonus declaration is first assessed for each
operation.
4. For each weighted element, there is a job
level related on-target (c) and maximum
(d) earning potential.
Upon assessment of Company performance by
the board, a bonus is either declared or not. If
declared:
Step 1:
The weighting of each element (a) is
multiplied by the achieved nominal (b)
and the results of the three added
together.
Step 2:
Then the sum of the three is multiplied
by the on-target % (c) to derive the
bonus percentage.
Step 3:
As a validation, a check is done against
the maximum % for each job. If the
calculated amount does not exceed the
maximum, the final bonus percentage is
multiplied by the annual incentive salary
to arrive at the final bonus payment.
(CP + TP + EP) x on-target percentage
= bonus percentage
The bonus percentage
(validated against the minimum
and maximum) x annual salary
= total bonus payable
MTN Group Limited
Integrated Report 2016
75
GOVERNANCE,
PEOPLE AND
REMUNERATION