Integrated Annual Report

Remuneration policy

The success of Transaction Capital and its divisions relies on a wide range of leadership, managerial, functional and technical skills. Many of these skills are unique to specific divisions, departments or organisational levels.

The entrepreneurial spirit of the group requires that the remuneration policy remains competitive and flexible, while encouraging positive outcomes and promoting an ethical culture and good corporate citizenship.

General employees

Throughout Transaction Capital, fixed and variable compensation policies and practices are structured to attract, motivate and retain the specific talent and skills required at each level for the progress of the group and its divisions. For the most part, these policies are determined by, and structured according to, divisional or departmental requirements within the remuneration principles described previously.


Transaction Capital regards the individual and collective intellectual acuity, education, experience and industry knowledge of its most senior leaders and talent pool as a core capability and a source of competitive advantage. As such, the compensation, recruitment, performance, development and succession of the group’s top executives are monitored directly by the CEO, together with his direct reports, with direct oversight by the remuneration and nominations committees and the board.

Executive compensation strives to attract, reward and retain the highest calibre of individuals in terms of education, expertise and experience, particularly in light of the specialised skillset required in the industries in which the group operates. In addition, executive remuneration strives to align executives with stakeholder priorities.

The different components of remuneration, summarised in the table below, aim to attract, motivate, align and retain scarce talent, while discouraging dysfunctional short-term behaviour.


Basic salary

Total CTC measured against the 60th percentile of the market.

Short-term incentives


Group life, provident fund, medical cover and disability cover.

Short-term incentives

Short-term incentives

Variable annual incentives based on achieving divisional/group quantitative
objectives, plus a qualitative portion awarded based on non-financial
measures and individual performance.

Short-term incentives

Long-term incentives

Executives participate in LTI schemes where their decisions are likely to have
an impact on shareholder value. These schemes serve to harmonise the
required attributes of shareholder alignment, retention of key talent and
long-term sustained performance.

Conditional share plan


Providing competitive and attractive total compensation with a portion paid
over the medium to long term.

Basic salary and benefits

Executive CTC is determined against the findings of an outsourced benchmarking engagement, utilising the Paterson Classic system as an indicator of grades for the executive team. This is measured against the 60th percentile of the market, taking into account the company’s market capitalisation, industry, revenue and earnings to ensure appropriate remuneration for level of seniority. Formal and informal research, coupled with market norms and industry practice, are also taken into consideration.

A market-related CTC provides executives with a competitive stable income and provides a standard of living consistent with the demands of a specific position. This represents a sufficiently high portion of the total remuneration to avoid overdependence on the variable components of remuneration.

No employees, including executives or directors, have employment terms that exceed six months’ notice. Where relevant, the company is not under any obligation to make exit payments for executives leaving the group; however, this may be considered on a case-by-case basis.

Executives receive additional benefits that provide financial structures for death, retirement, health and wellness.

Short-term incentives

The overall award of STIs for executive directors aligns with the performance of the respective divisions. STIs promote the achievement of strategic objectives determined annually, based on the requirements of the group within the organisation’s risk appetite as well as positive outcomes.

Quantitative and qualitative targets are pre-approved by the remuneration committee prior to the commencement of the forthcoming financial year for group and divisional executives.

  • Group/divisional CEO – up to nine months. (Maximum weighting: 75% of STI award)
  • Other executives – up to six months. (Maximum weighting: 67% of STI award)
Up to three months.
(Maximum weighting: 25% to 33% of STI award)

A combination of factors is considered in setting quantitative STI targets, depending on the role of the executive and the division in which they are employed (as pre-approved by the remuneration committee):

  • Growth in headline earnings per share (HEPS) above consumer price inflation (CPI).
  • Return on equity or invested capital.
  • New business origination or growth in revenue.
  • Unfettered access to debt capital or the reduction in the cost of capital.
The remuneration committee considers individual performance in meeting strategic imperatives, which include:
  • Strategy implementation.
  • Meeting employment equity targets.
  • Transformation strategy implementation.
  • Sustainability performance targets.
  • Efficient capital management.
  • Identification, successful implementation and integration of acquisitions.
  • Implementation of operational, technology and risk management projects.
  • Other non-financial key performance indicators (KPIs).

In instances where – in the opinion of the remuneration committee – an individual executive has outperformed set KPIs, a discretionary STI may be awarded. A portion of this award may be deferred or delivered in the form of share plan awards.

The remuneration committee must satisfy itself that such payments are fair and reasonable, and are disclosed to shareholders as required by remuneration governance principles.

Long-term incentives

Executives participate in LTI schemes where their decisions have an impact on shareholder value. These schemes serve to harmonise the required attributes of shareholder alignment, retention of key talent and long-term sustained performance.


The remuneration committee instituted a policy in 2019 that key executives should hold a meaningful interest in the equity value of Transaction Capital, with a minimum target exposure to Transaction Capital’s equity value maintained at three times annual CTC (held directly or indirectly). Where the equity value of a key executive of the group is determined to be low, accelerated annual LTI awards or a once-off LTI award may be awarded.

The remuneration committee continuously reviews the equity value held by key executives in the group. The policy aims to apply appropriate retention mechanisms (through equity value) while ensuring alignment to the interests of Transaction Capital’s shareholders. The assessment of the executives’ equity value comprises:

  • The value of LTI allocations, subject to the fulfilment of vesting conditions, awarded in terms of the CSP.
  • The value of direct shareholding in Transaction Capital. These positions may be historic or due to the vesting of LTIs.
  • The value of direct shareholding in a subsidiary of Transaction Capital.


The CSP provides executives with an opportunity to share in the equity growth and success of Transaction Capital and that of the division in which they are employed. This provides direct alignment between the executives and shareholders as any vesting amount of the CSP is based on the company’s share price for group employees and on divisional valuations for divisional employees.

Transaction Capital has a decentralised management structure that devolves authority and responsibility to its respective divisions, SA Taxi and TCRS. To support this strategic objective, a primary objective of the LTI scheme is to link the scheme’s performance to the equity value of the respective divisions. While Transaction Capital group executives are incentivised based on the share price and performance of the group as a whole, the CSP also caters for divisional executives who are believed to be in a position to directly impact the performance and valuation of each division, while delivering on the division’s strategy. Its purpose is to incentivise participants to deliver on business strategy over the long term, and to act as a retention mechanism and tool to attract prospective employees.

The CSP offers participants certainty in that it comprises a fixed number of conditional shares. While its ultimate value will depend on performance, CSP awards will always have value.

The first tranche of CSPs was awarded in November 2016. Annual CSP awards occur in November/December each year, with interim awards catering for new joiners and special circumstances. All awards are subject to remuneration committee approval.

Executives’ CTC and job grades are considered in the quantum of awards. In general terms, the following annual awards are granted:

  • 50% of CTC – executive directors or divisional directors/ executives.
  • 30% of CTC – senior executives.
  • 20% of CTC – junior executives and scarce skills requiring retention.

The remuneration committee may apply discretion for CSP awards granted in addition to the formulaic job grade awards (as detailed above) depending on:

  • Executive performance delivered.
  • Potential and tenure.
  • STIs relative to market benchmarks.
  • An executive’s equity value assessed against the group’s executive investment policy.

The CSP mechanism is overseen and approved by the remuneration committee. It operates as follows:

Grant price 10-day volume weighted average
price (VWAP) of Transaction
Capital share on date of issue.
Divisional notional value per share on date of issue.
Number of
CSPs granted

Equal to the monetary value of the LTI award, as approved by the remuneration committee, divided by the
approved share price of the relevant member group to which the LTI award relates.

Exercise price 10-day VWAP of Transaction
Capital share on date of exercise.
Divisional notional value per share on date of exercise.
Valuation Transaction Capital share price. A valuation of each division is performed by an independent expert on the
date of the CSP award and exercise. Among others, the following key
metrics are considered in determining divisional valuations:
  • Level of revenue and earnings.
  • Growth in revenue, cost-to-income ratios and HEPS.
  • ROE, return on assets and net asset value.
  • Credit performance.
  • Assessment of quality of earnings and expected future performance.
  • Dividend pay-out rates and cash conversion levels.
  • A “sum of the parts” of the divisions is compared to the group market capitalisation for reasonability.

Executives receive CSP awards for zero cost.


The CSP vesting period was amended in 2019 to vest in years three, four and five after the award, in equal
proportions of 33.33% per annum.


Performance criteria are pre-set by the remuneration committee for each vesting period.

The most recent performance criteria have been set as follows (per division for divisional executives, and on a consolidated basis for group executives):

Thresholds Continuing core HEPS growth over vesting period ROE target % of CSP to
be awarded*
Minimum vesting CPI (South Africa) ≥ 15% 25%
CPI (Australia) ≥ 9% 25%
On-target performance CPI + 9% (South Africa – Group and SA Taxi) ≥ 16% 100%
CPI + 7% (South Africa — TCRS) ≥ 16% 100%
CPI + 5% (Australia) ≥ 10% 100%
* Growth levels between bands will be vested on a proportionate basis.

Note that the valuation, and thus the benefit received by executives on vesting, is determined on the share price of Transaction Capital for group executives and on the divisional valuations for divisional executives. This provides direct alignment with shareholders and takes into account the performance and valuation of the group and divisions as a whole. As such, executives are exposed to all performance metrics of the group on which the valuation of the group is determined, and not simply the metrics of growth in core HEPS and ROE over the vesting period.

Commencing from the May/June 2019 CSP awards and in line with the revised remuneration policy, no further awards based only on continued employment of an executive have been issued.

Stretch performance

Stretch-performance is to be rewarded, where select executives (as approved by the remuneration committee on
every CSP issuance) will receive an additional component equal to 25% of their CSP settlement value, should
predetermined stretch-performance criteria be met. Stretch-performance criteria will be set annually by the
remuneration committee with reference to CPI, the operating environment and budgets and can include growth
in core HEPS (as tabled below) and ROE above 20%.

Continuing core HEPS growth
Group > 20%
SA Taxi > 20%
TCRS > 15%

If minimum targets are not achieved, there will be no additional settlement.

Delivery Once the vesting period has passed and performance criteria are met, the participant receives shares in
Transaction Capital to the value of the notional CSP awards on date of vesting.
Employees are required to remain in the employ of the group to be eligible for vesting of the CSP (subject to
standard ‘good leaver’ rules). However, no portion of the CSP award is based on continued employment
alone, and all are subject to the performance criteria detailed above.

The CSP achieves the following objectives:

  • It motivates and rewards participants for creating long-term value through the opportunity to earn significant reward for superior performance.
  • It creates a direct line of sight between the performance of each division and the incentive earned.
  • Participants receive a right to a full share.
  • It directly aligns the interests of the participants with those of shareholders.

The remuneration committee approved a policy stipulating that the number of Transaction Capital shares issued in terms of the CSP awards will not exceed more than 5% of the issued ordinary shares of Transaction Capital at the time of approval of the CSP by shareholders. The CSP was approved by shareholders at a general meeting held on 20 October 2016.


Through the SAR plan, executives and senior managers participate in the appreciation of Transaction Capital’s share price over time, subject to pre-defined performance criteria.

The SAR plan is an option-type plan (at no cost to the participant), with the awarded SARs equity-settled after being exercised. The SAR plan awards a conditional right to a participant to receive a number of shares, the value of which is equal to the difference between the market value of the Transaction Capital share on the date of exercise and the date of grant. In other words, the participant is able to enjoy the increase in Transaction Capital’s share price from the grant date until the date on which the conditional rights are exercised.

The share price growth over the SAR plan period is settled in Transaction Capital ordinary shares, with the gain subject to income tax. To the extent that the SAR plan grant price exceeds Transaction Capital’s share price at the time of exercise, no gain or cost is realised by participants.

Subject to the specific performance criteria of achieving continuous growth in group core HEPS of 5% above CPI, the SAR plan vests in full after four years of the award date and is exercisable for a 12-month period thereafter.

While the SAR plan has been a successful mechanism to retain select employees since listing, the group favours the CSP (discussed previously) as a more appropriate tool. This is in line with international trends towards less volatile and lower geared LTIs, which have proved to provide better alignment of performance with shareholder interests, as well as being less likely to result in extreme pay-outs. As such, no new SAR plan awards have been granted since November 2015, with the last SARs awarded vesting in May 2020, all of which have subsequently been exercised.

The remuneration committee will assess the future use of SARs on a periodic basis, as required.


Under appropriate circumstances, senior executives of a business may be afforded the opportunity to co-invest in that business (generally by way of an equity subscription partly funded by the company), which incentivises and aligns their long-term interests with those of the business, Transaction Capital and its shareholders.


Jonathan Jawno and Michael Mendelowitz are executive directors of the group, while Roberto Rossi is a non-executive director with a consulting and project contract.

As the founding directors, Jonathan Jawno, Michael Mendelowitz and Roberto Rossi continue to be actively involved in supporting executive line management in various aspects of the group’s businesses. This involvement includes strategy, operations, acquisitions, disposals, capital raising, capital management, regulatory matters and participation in group and divisional management where appropriate. The board believes that the founding directors’ participation in this manner adds considerable value for shareholders on an ongoing basis.

Due to circumstances and history, the remuneration and fee arrangements of the founding directors are not conventionally structured. As founders of Transaction Capital, none of the founding directors participate in any of the group’s LTI plans. The base packages of the executive founding directors have historically been set well below market-related fees for directors of their calibre. During the 2020 financial year, the packages of the founders were rebased to reflect market-related remuneration as approved by the remuneration committee. Roberto Rossi’s fees earned as a non-executive director and for consulting services were also historically below market and have been rebased to reflect a market-related fee during the 2020 financial year.

At the end of each financial year, the independent non-executive members of the remuneration committee, in consultation with the CEO, consider the founding directors’ inputs and successes during the year. The remuneration committee then awards incentive bonuses relative to quantitative and qualitative performance to determine an appropriate total remuneration award with reference to market benchmarks for comparable listed companies in size and industry.

Michael Mendelowitz, Roberto Rossi and Pilatucom Holdings Limited (the shares of which are held in trusts in which Jonathan Jawno is a contingent discretionary beneficiary) collectively continue to be a significant shareholder of the group.

Non-executive directors

The annual fees paid to non-executive directors of the company for their services as directors and as members of the various board sub-committees are determined on a market-related basis and are benchmarked against industry norms. No additional meeting attendance fees are paid.

The fees are approved by the remuneration committee and the board prior to being presented to shareholders for approval at the group’s AGM.

Directors are required to retire on the third anniversary of their appointment and may offer themselves for re-election. As appropriate, the board, through the nominations committee, proposes their re-election to shareholders.

Non-executive directors do not participate in any of the group’s LTI plans.