Gold Fields

Summarised remuneration report

This is a summarised version of the Remuneration Committee’s Remuneration Report, the full version of which can be found in the Annual Financial Report.

The Gold Fields remuneration policy is closely aligned to the deliverables as set out in our Group strategy so that the remuneration and rewards offered to employees drive the delivery of our strategic objectives, and thus the interests of shareholders.

The committee has been mandated by the Gold Fields Board to oversee all aspects of remuneration in a fair, transparent and responsible way, and to ensure feedback to the Board on all decisions taken by the committee. During 2017, the committee complied with all relevant regulatory and legal requirements as they relate to remuneration of employees in all our jurisdictions.

Furthermore during 2017 the King IV Report on Corporate Governance (King IV) was released in South Africa and specific focus has been placed on Principle 14 that relates to remuneration. In particular, it emphasises that remuneration practices should be equitable, responsible and transparent, linked to the company strategy and the result should be continued stakeholder value creation. We strive to ensure that our remuneration policy and practices meet the provisions of King IV.

As discussed in our full Remuneration Report, our general pay structure comprises a combination of cash, benefits and short- and long-term incentives designed to ensure the delivery of our strategy. We review the terms of reference of the committee to ensure it aligns with regulatory requirements and best practice.

The committee has worked closely with management and our external advisors to improve on relevant best practice. We believe the work done during the year in this regard has been positive, helping us to meet our objectives and, importantly, align our interests with those of our stakeholders.

Over the last few years the committee, together with management, have engaged with our large institutional investors on numerous occasions to discuss the remuneration policy, with particular focus on transparent disclosure that highlights fair and responsible remuneration practices.

What we have focused on over the year:

• Annual long-term incentive revision for implementation during 2018
• Peer survey for executive remuneration
• Finalised executive remuneration for 2017
• Set bonus targets for 2017
• PwC appointed independent advisor to the committee
• Final approval for the minimum shareholding requirement policy
• Approved the implementation of a clawback policy
• Awarded long-term incentives to eligible management-level employees
• Approval of executive appointments
• Adoption of King IV remuneration principles
• Approved the Remuneration Committee charter

The fundamental principles of our remuneration policy remain unchanged, namely that the policy should:

• Provide competitive rewards to encourage ownership in the business by employees, as well as setting stretched performance targets for the delivery of rewardbased, variable, short-term and long-term incentive plans
• Provide focused alignment to the corporate strategy through cascading scorecards to different levels of the organisation. The graphic on p134 illustrates the link between strategy, deliverables and pay-for-performance approach
• Motivate and reinforce individual, team and business performance in the short, medium and long term
• Promote an environment that embeds an ethical culture centred on the Company values
• Encourage remuneration incentives that attract and retain motivated, high-calibre executives and senior managers
• Ensure that the Company’s executive remuneration policy encourages, reinforces and rewards the delivery of sustainable shareholder value

Aligned with these fundamentals the Committee, together with the Executive Committee, continuously considers ways to improve alignment between remuneration and our Group strategy and the interest of our stakeholders. This year we introduced a clawback policy, reviewed and aligned the minimum shareholding policy and evolved the long-term incentive plan to incentivise improved performance at regional level among senior management. In doing so, we reassessed the objectives and measures that drive group, regional and individual performance and in particular focused on four key strategic areas in order to maximise total shareholder returns sustainably. These four strategic focus areas are:

• protect our licence and enhance reputation;
• capital discipline through managing our balance sheet and maximising capital returns;
• safe operational delivery ensuring sustainable cash flows; and
• improve the quality of our portfolio. We believe that we have achieved this through the introduction of the new cashsettled, long-term incentive plan, through which eligible senior management level employees will receive awards going forward.

Performance

We conduct annual benchmarking to compare levels of pay at the market median in industry-related companies of comparable size and complexity, while taking into account affordability, performance and economic conditions.

The committee also conducted a comprehensive independent review and analysis of the Group Executive Committee’s remuneration packages, which confirmed that executive compensation was aligned to our Group strategy and that our executives’ remuneration is realistically positioned against executives in comparative peer companies.

The committee believes that the remuneration policy was enforced in a way that remunerated employees of Gold Fields fairly, transparently and reasonably for the achievement of the Group strategic objectives set for the 2017 financial year and promoted positive outcomes in the short, medium and long term. We will continue to ensure that fair, equitable and responsible remuneration processes are implemented to drive the achievement of Group strategic objectives and ultimately promote maximum stakeholder value creation.

Executive directors’ and prescribed officers’ remuneration

The table of remuneration for the executive directors and prescribed officers on the basis of the total single figure of remuneration (2016 figures have been revised and represented due to adoption of King IV) as prescribed by King IV is disclosed below.

As a result of the adoption of the remuneration reporting requirements under King IV the terminology used in the table below has been assigned the following meanings:

Reflected – King IV requires the disclosure of a total single figure of remuneration, received and receivable for the reporting period which ties remuneration to the individuals performance for the period. In respect of the cash LTI plan and matching shares the remuneration is reflected given that the company performance conditions have been met during the reporting period. The continued service and/ or continued employment requirements of the cash LTI plan and matching shares are not considered a factor for including the remuneration in the total single figure of remuneration. Remuneration included may not have legally transferred to the individual and the individual may not yet have the unconditional right to enjoy the benefits therefrom.

Settlement - This refers to remuneration that has been included in the total single figure of remuneration in respect of any prior period, but has only been unconditionally transferred to the individual concerned in the current period.

Not yet settled - This refers to remuneration that has been included in the total single figure of remuneration in the current period, but has not been unconditionally transferred to the individual concerned in the current period, or where an election has been made by the individual to defer the settlement thereof in fulfilment of their minimum shareholding requirement.

Unconditional transfer - Means (excluding any applicable malus or claw back) that the individual now enjoys full right to the remuneration, and it is no longer subject to any further service, employment or other conditions.

All figures stated in US$'000		Salary1 US$	Pension  fund  contribution  US$	Cash  incentive2 US$	Cash  LTI plan  reflected3 US$
EXECUTIVE DIRECTORS
Current
NJ Holland	2017	1,186.9	26.3	1,002.2	463.5
NJ Holland8	2016	1,030.0	40.9	1,355.2	500.5
PA Schmidt	2017	588.6	48.2	542.7	459.0
PA Schmidt	2016	496.7	54.4	648.6	242.6
PRESCRIBED OFFICERS
Current
L Rivera9	2017	626.3	—	270.4	—
L Rivera9	2016	154.5	—	111.0	—
A Baku10	2017	784.7	180.5	719.8	463.5
A Baku10	2016	746.1	156.4	620.2	304.2
R Butcher	2017	353.0	37.9	278.5	—
R Butcher11	2016	275.1	27.5	323.2	—
NA Chohan12	2017	342.8	26.3	288.3	126.0
NA Chohan	2016	284.0	27.7	328.6	88.6
B Mattison	2017	426.7	26.3	369.9	297.0
B Mattison	2016	362.4	25.5	429.7	192.5
T Harmse	2017	344.7	26.3	290.1	252.0
T Harmse	2016	282.3	29.5	345.7	138.6
A Nagaser14	2017	228.1	25.3	192.0	90.0
A Nagaser	2016	193.9	21.5	221.1	—
S Mathews15	2017	397.5	21.2	326.1	—
M Preece16	2017	338.2	16.6	—	—
Separated
L Samuel17	2017	384.3	17.5	—	—
L Samuel	2016	288.4	24.8	339.9	181.0
R Weston18	2017	102.0	4.5	—	216.0
R Weston	2016	576.4	64.2	570.7	350.4
E Balarezo19	2016	332.5	—	—	—
M Diaz20	2016	136.1	—	1.2	—
N Muller13	2017	129.4	6.6	—	—
N Muller	2016	450.4	26.4	477.0	23.1

               

All figures stated in US$'000	Matching  shares  reflected4 US$	Other5 US$	Total  single  figure of  remuneration  US$	Less:  Amounts  not yet  settled6 US$	Add: Cash value on settlement7 US$	Total  cash  remune-  ration  US$
EXECUTIVE DIRECTORS
Current
NJ Holland	942.8	—	3,621.7	(2,408.5)	677.6	1,890.8
NJ Holland8	—	—	2,926.6	(1,855.7)	618.9	1,689.8
PA Schmidt	157.5	4.0	1,800.0	(1,159.2)	891.2	1,532.0
PA Schmidt	—	4.0	1,446.3	(891.2)	1,162.3	1,717.4
PRESCRIBED OFFICERS
Current
L Rivera9	—	253.3	1,150.0	(486.7)	111.0	774.3
L Rivera9	—	246.4	511.9	(111.0)	—	400.9
A Baku10	51.9	150.2	2,350.6	(1,235.2)	924.4	2,039.8
A Baku10	—	314.5	2,141.4	(924.4)	726.9	1,943.9
R Butcher	—	—	669.4	(278.5)	323.2	714.1
R Butcher11	—	110.7	736.5	(323.2)	—	413.3
NA Chohan12	54.0	3.3	840.7	(468.3)	417.2	789.6
NA Chohan	—	2.9	731.8	(417.2)	540.3	854.9
B Mattison	55.4	1.0	1,176.3	(722.3)	622.2	1,076.2
B Mattison	—	0.6	1,010.7	(622.2)	620.2	1,008.7
T Harmse	10.0	6.8	929.9	(552.1)	484.3	862.1
T Harmse	—	4.3	800.4	(484.3)	422.1	738.2
A Nagaser14	—	0.7	536.1	(282.0)	221.1	475.2
A Nagaser	—	0.3	436.8	(221.1)	208.5	424.2
S Mathews15	—	10.0	754.8	(326.1)	—	428.7
M Preece16	—	—	354.8	—	—	354.8
Separated
L Samuel17	—	198.9	600.7	—	520.9	1,121.6
L Samuel	—	3.7	837.8	(520.9)	667.2	984.1
R Weston18	44.8	7.6	374.9	(260.8)	921.1	1,035.2
R Weston	—	7.4	1,569.1	(921.1)	1,044.2	1,692.2
E Balarezo19	—	1,644.4	1,976.9	—	425.7	2,402.6
M Diaz20	—	—	137.3	(1.2)	—	136.1
N Muller13	—	34.0	170.0	—	500.1	670.1
N Muller	—	2.4	979.3	(500.1)	423.5	902.7

Average exchange rates were US$1=R13.33 for the FY2017 and US$1 = R14.70 for the FY2016.
1	The total US$ amounts paid for 2017, and included in salary, were as follows: NJ Holland US$396,500, P Schmidt US$121,000, B Mattison US$86,000. The total US$ amounts paid for 2016, and included in salary, were as follows: N Holland US$384,333, P Schmidt US$115,833, B Mattison US$70,417.
2	The annual bonus accruals for the year ended 31 December 2016 and 31 December 2017, paid in February 2017 and February 2018 respectively.
3	The value of the 2014 cash LTI plan with a performance period ending on 31 December 2016 is reflected in the 2016 total single figure of remuneration. The value of the 2015 cash LTI plan with a performance period ending on 31 December 2017 is reflected in the 2017 total single figure of remuneration.
4	The 2017 total single figure of remuneration includes the cash equivalent value of matching shares awarded in terms of the MSR policy during 2017.
5	Other includes special bonuses, incidental and severance payments unless otherwise stated.
6	Includes cash Incentive, cash LTI plan and matching shares reflected for the year.
7	The 2017 figure includes the bonus related to the 2016 financial year, paid in February 2017 and the 2014 cash LTI plan vested and settled in March 2017. The 2016 figure includes the bonus related to the 2015 financial year, paid in February 2016 and the 2013 performance shares vested and settled in March 2016. For NJ Holland, the 2017 figure does not include the 2014 cash LTI plan as well as 50% of the 2016 bonus, because he elected to receive restricted shares in lieu of these amounts, and the 2016 figure does not include the 2013 performance shares and 50% of the 2015 bonus because he elected to receive restricted shares in lieu of these amounts.
8	NJ Holland elected prior to the determination of his annual performance bonus for 2016 to receive 50% of his annual performance bonus (US$677,600 = 50%) in restricted shares. He also elected prior to the vesting of the 2014 cash-settled LTI plan award to receive 100% of this amount (US$500,500 = 100%) in restricted shares. The full bonus and cash LTI plan calculated for NJ Holland is reflected in the total single figure of remuneration and thus the receipt of restricted shares has been disregarded in calculating the total single figure of remuneration in line with King IV.
9	L Rivera - Appointed on 1 October 2016, other payments for 2016 relates to sign-on and legislated bonuses and 2017 to legislated bonuses.
10	A Baku - Other payments for 2016 relates to leave allowance and final payment of a retention bonus. 2017 relates to leave allowance.
11	R Butcher - Appointed on 8 February 2016 - other payments for 2016 relates to sign-on bonus.
12	NA Chohan elected prior to the determination of his annual performance bonus for 2017 to receive 5% of his annual performance bonus (US$15,004 = 5%) in restricted shares. The full bonus calculated for NA Chohan is reflected in the total single figure of remuneration and thus the receipt of restricted shares has been disregarded in calculating the total single figure of remuneration in line with King IV.
13	N Muller - Resigned 31 March 2017.
14	A Nagaser elected prior to the determination of his annual performance bonus for 2017 to receive 20% of his annual performance bonus (US$38,401 = 20%) in restricted shares. The full bonus calculated for A Nagaser is reflected in the total single figure of remuneration and thus the receipt of restricted shares has been disregarded in calculating the total single figure of remuneration in line with King IV.
15	S Mathews - Appointed on 1 February 2017.
16	M Preece - Appointed on 15 May 2017.
17	L Samuel - Resigned 31 July 2017. Other payments for 2017 include a payment in lieu of notice.
18	R Weston - Retired 28 February 2017. His pro-rated performance shares will be settled on the final vesting date at the end of the three-year performance period.
19	E Balarezo - Terminated employment by mutual agreement during 2016. Other payments for 2016 includes a payment in lieu of notice.
20	M Diaz - Terminated employment by mutual agreement during 2016.

PAY-FOR-PERFORMANCE MODEL