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Government Employees Pension Fund of South Africa

PRI reporting framework 2017

You are in Direct - Listed Equity Active Ownership » Engagement

Engagement

Overview

LEA 01. Description of approach to engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate whether your organisation has a formal engagement policy.

01.5. Additional information [optional]

GEPF has drafted a formal engagement policy but has not yet been approved by the board


LEA 02. Reasoning for interaction on ESG issues (Not Completed)


Process

Process for engagements conducted via collaborations

LEA 05. Process for identifying and prioritising collaborative engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

05.1. Indicate whether your organisation has a formal process for identifying and prioritising collaborative engagements

05.3. Additional information [Optional]


LEA 06. Objectives for engagement activities (Not Completed)


Process for engagements conducted with/on your behalf by service providers

LEA 07. Role in engagement process

New selection options have been added to this indicator. Please review your prefilled responses carefully.

07.1. Indicate if you play a role in the engagement process that your service provider conducts on your behalf.

07.3. Additional information. [Optional]


LEA 08. Monitor / discuss service provider information

08.1. Indicate whether you monitor and/or discuss the following information provided to you by your service provider

Please select all that apply

08.2. Additional information. [Optional]


General processes for all three groups of engagers

LEA 09. Share insights from engagements with internal/external managers

09.1. Indicate if insights gained from your engagements are shared with your internal or external investment managers.

Type of engagement

Insights shared

Collaborative engagements

Service provider engagements

09.2. Additional information. [Optional]


LEA 10. Tracking number of engagements

10.1. Indicate if you track the number of engagements your organisation participates in.

Type of engagement
Tracking engagements

Collaborative engagements

Service provider engagements

10.2. Additional information. [OPTIONAL]


Outputs and outcomes

LEA 11. Number of companies engaged with, intensity of engagement and effort

11.1. Indicate the amount of your listed equities portfolio with which your organisation engaged during the reporting year.

Number of companies engaged

(avoid double counting, see explanatory notes)

Proportion (to the nearest 5%)
Specify the basis on which this percentage is calculated

Collaborative engagements

0
0 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

Service provider engagements

41
100 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

11.2. Indicate the proportion of engagements that involved multiple, substantive and detailed discussions or interactions with a company during the reporting year relating to ESG issue.

Type of engagement

% Comprehensive engagements

 

 

Collaborative engagements

 

 

Service provider engagements

11.3. Indicate the percentage of your collaborative engagements for which you were a leading organisation during the reporting year.

Type of engagement

% Leading role

 

 

Collaborative engagements

11.4. Indicate the percentage of your service provider engagements that you were highly involved in during the reporting year.

Type of engagement

% High involvement

 

 

Service provider engagements

11.5. Additional information. [Optional]


LEA 12. Engagement methods (Not Completed)


LEA 13. Engagements on E, S and/or G issues (Not Applicable)


LEA 14. Companies changing practices / behaviour following engagement

14.1. Indicate whether you track the number of cases during the reporting year where a company changed its practices, or made a formal commitment to do so, following your organisation’s and/or your service provider's engagement activities.

14.3. Additional information [Optional].


LEA 15. Examples of ESG engagements

15.1. Provide examples of the engagements that your organisation or your service provider carried out during the reporting year.

Topic or ESG issue
          Remuneration policy
        
Conducted by
Objectives

The ESG team engaged with a company in November 2016 and the meeting was attended by the Chairman of the Remuneration Committee and the CEO. The purpose of the meeting was to engage major shareholders on the remuneration policy after many shareholders had voted against the policy in the previous year.

Scope and Process

Remuneration policy: In response PIC gave clarity on the following issues with regard to the remuneration policy:

It was indicated that some indicators were already disclosed in the report and they just needed to be aligned to reward system.
The PIC suggested that the KPIs should have performance measures and targets and weightings must be allocated to these indicators.
The PIC also provide guidance on the Long Term Incentive Plan and encouraged Resgen to have performance conditions for the LTI and indicators that could be included are Headline Earnings Per Share (HEPS), Total Shareholder Return (TSR) and Return on Capital Invested (ROIC).
The PIC also suggested companies that Resgen could align their remuneration policy to.

Outcomes

It was agreed that the PIC and the company will engage further and a meeting will be scheduled in February to update the PIC on the progress.

Topic or ESG issue
          Remuneration policy
 	Independence of Auditors
        
Conducted by
Objectives

The ESG team engaged with a company and the meeting was attended by the Chairman, Lead Independent Director and the Director of Human Resources. The purpose of the meeting was to discuss the notice of the AGM and to discuss any ESG related matters

Scope and Process

Remuneration policy: The PIC raised the issue that although the remuneration policy is well articulated with performance indicators and non-financial factors, weightings have to be allocated to these indicators. In addition there have to be specific long-term targets for the LTI performance conditions.
The PIC also raised the issue of the independence of the auditors who has been the auditors of the company for more than 10 years. The company noted the matter and stated that they are still having a discussion to put in place plans to rotate the firm.

Outcomes

PIC voted against the resolution on re-election of independent auditors.

Topic or ESG issue
          Remuneration Policy
        
Conducted by
Objectives

The meeting was attended by the Chairman of the Remuneration Committee and the Company Secretary to present changes in the remuneration policy after the PIC voted against the remuneration policy.

Scope and Process

The PIC voted against the remuneration policy as it was inconsistent with best practice. While the policy had some disclosure of key performance indicators, there were no weightings disclosed. 

Outcomes

PIC has noted that the company has since improved its disclosure on the remuneration policy and has incorporated issues that were raised in the previous meetings. The remuneration policy is linked to the strategy of the business and has performance indicators, targets and weightings in place. Therefore, in the latest AGM the PIC voted in favour of all the resolutions.

15.2. Additional information. [Optional]


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