SOE Executive Management Performance and Remuneration Structure

1. SOE Executive Management Performance and Remuneration Structure

2. SA Express Performance Management

3. Result Planning Reviewing Tracking THE PERFORMANCE MODEL Business Objectives • Strategic Planning • Objectives • Targets • Contract • Development Plan • Reward and recognition • STI and LTI • Managing Poor Performance • Informal reviews (1-on-1) • Monitoring Performance • Feedback • Coaching • End of cycle formal review (Bi-annual) • Development Plans Talent Management – Remuneration - Development

4. Performance Management Methodology • Measurable objectives • SA Express measures the following 5 perspectives for a balanced approach to performance • Finance • Strategic • Customer • Business Process • Learning and Development • Mechanism • Short-Term Incentive Scheme • SA Express uses the Balance Scorecard Performance Management System for all levels (including Executives) • The Performance Contracts are cascaded from the Corporate targets • Performance Bonuses are only payable if the Corporate targets are met • Long-Term Incentive Scheme • Linked to retention • Is a rolling three year incentive scheme for all management (including critical skills at a staff level) • 90% of the STI is banked for 2 years for the individual • All Executives and Management who gained entry to the scheme must achieve and sustain performance • Processes • All scorecards are contracted once a year • All reviews are done twice a year – In consultation with and on approval by the CEO • Bonuses are only payable on approval by the board

5. SA Express Talent Management

6. Leadership and Talent management Framework (LTF\MF) Jim Collins Good to Great Steve Drotter Leadership Pipe line Model Elliot Jacques SST (Stratified Systems Theory) Strategic Intent Strategic Execution Tactical Management Optimisiing Systems Manage a Business 5 Executive Complexity / Work Levels Effective Leader 4 Manage Managers Competent Manager 3 Contributing Team Member 2 Manage Others Highly Capable Individual 1 Manage Self All global theories amount to similar outcomes…

7. Talent Management Corporate Plan Leadership Imperatives Strategic positions Talent Management Talent Pools Deployment of Talent Succession Identify - Assess - Accelerate Retention Strategies • Build • Buy • Development • Reward and Recognition Leadership - Communication - Accountability - Skills Alignment - Measurement

8. Succession Planning Develop job profiles Identify SP jobs Identify successors PAD SITUATIONAL ANALYSIS •Vision, mission, strategy •Future work demand predictions •Future incumbent supply predictions RESOURCING OBJECTIVES •Current occupied • to be maintained • to be eliminated •Current vacant • internal appointment • external appointment •New jobs to be created •internal appointment •external appointment GAPS •Key focus areas, Business criteria, Demand vs Supply Strategic Resourcing RESOURCING STRATEGY •Recruitment and Selection •Redeployment •Transfers •Designate positions •Succession planning Develop successors Appoint successor to target job Documentation / reporting SP - Succession Plan 6

9. Leadership Development Levels of work • Executive Development • Mentorship and Coaching • Business Schools • (Short courses) • Global Exposure • Strategic conversations • Book Reviews Global Leadership Development Model Workplace Team Individual Leadership Pipeline SA Express MDP SA Express SDP

10. SA Express Structure Management

11. Top echelon SA Express Board of Directors Chief Executive Officer Chief Financial Officer Company Secretary Executive Manager Finance Executive Manager Safety, Security, QM and Environment Regional General Manager African Expansion General Manager Strategy and Market Development Executive Manager Legal Chief Information Officer General Manager Operations Executive Manager Airport Operations General Manager Commercial Executive Manager Marketing and Customer Care General Manager Human Resources General Manager Technical

12. Demographic Breakdown • Total Executive Head Count of 15 as at 12 March 2010 • Race Profile = 20% white and 80% black • Gender profile = 40% female and 60% male. • Overall employment profile reflects very positively against national and industry benchmarks

13. Turnover at an Executive Level Turnover: 6% Average (Open/Close -1 *100) Status and filling of vacancies • Position requirements changed due to restructuring at an executive level • The SA Express CEO position will become vacant within the next month

14. SA Express Remuneration Management

15. Remuneration Philosophy Market Benchmark + Long-term Incentive Variable Pay + Short-term Incentive + Other Benefits + Cost of employee benefits Total Earnings / Total Cost to Company Total Remuneration / Total Cost of Employment Base / Basic Salary Guaranteed Package Fixed Pay Base / Basic Salary SA Express Remuneration Philosophy

16. Executive Management Remuneration Framework • SA Express pays on the median as per its Remuneration Philosophy • SA Express adheres strictly to the DPE Remuneration guidelines for all Directors • Movement adjusted against CPI since publication • Board members are afforded industry travel concessions

17. Summary Performance Management • SA Express Performance Management is well entrenched Talent Management • The Talent Management Framework leads to a consistent supply of talented leaders • Build – Talented individuals are identified through the Performance Management System • Buy – We recruit Talent from the Private and Public sector • The succession plan has been in place since 2006 and reviewed annually Organisation Management • SA Express experienced low staff turnover and managed to reduce the number of Execs through efficiencies • The long-term retention mechanisms proofs to be successful Remuneration Management • SA Express adheres to the DPE guidelines for SOEs • SA Express remains competitive against market demands • SA Express is in line with market benchmarks and will continuously uphold its philosophy

18. Thank You Q & A