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Annual report suite 2012

Remuneration report

Remuneration philosophy

The fundamental core of AngloGold Ashanti’s leadership philosophy is “People are the business... Our business is people”. This reflects the importance of our employees who are fundamental to the business and therefore the attraction and retention of our people through robust, sound policies and procedures is key.

A holistic remuneration approach is followed which includes guaranteed pay (comprising of base pay and benefits) and variable pay (which is separated into long term incentives and short term incentives). All elements play a key role in attracting and retaining our people. To support this philosophy we therefore:

  • Align the behaviours and performance of our senior management and executives with the strategic goals of the organisation, by offering competitive incentive plans with performance goals in place that align both their and our shareholders’ interests;
  • Benchmark our executive remuneration against a comparator group of global and South African mining and multi-national companies. The comparator group is reviewed annually to ensure that it continues to be appropriate;
  • Continue to encourage the development of our employees to meet our business needs;
  • Ensure that our employees share in the success of our company; and
  • Continue to ensure that the correct governance frameworks are applied to all decisions and practices around remuneration throughout AngloGold Ashanti.

Executive contracts

All members of the Executive Committee have permanent employment contracts which entitle them to standard group benefits as defined by their specific region and participation in the company’s short term incentive scheme, the Bonus Share Plan (BSP), and the Long-Term Incentive Plan (LTIP).

South African executives have dual contracts which reflect the percentage of their time focused on offshore business requirements.

The executive contracts are reviewed annually and currently continue to include a change of control provision. The change of control is subject to the following triggers:

  • The acquisition of all or part of AngloGold Ashanti; or
  • A number of shareholders holding less than 35% of the company’s issued share capital consorting to gain a majority of the board and make management decisions; and
  • The contracts of Executive Committee members are either terminated or their role and employment conditions are curtailed.

In the event of a change of control becoming effective, the executive will in certain circumstances be subject to both the notice period and the change of control contract terms. The notice period applied per category of executive and the change of control periods as at 31 December 2012 were as follows:

Executive Committee member Notice period Change of control
Chief Executive Officer 12 months 24 months
Chief Financial Officer 9 months 9 months
Other Executive Committee members 6 months 6 months

The board in negotiation with the executive has the discretion to mutually agree the duration of the notice period, as a result:

  • Following on from his resignation and appointment to Anglo American, the board mutually agreed with Mark Cutifani to reduce his notice period from 12 months to three months; and
  • In negotiating conditions for the acting chief executive officers in January 2013 with both Tony O’Neill and Srinivasan Venkatakrishnan, and in exchange for a ‘stay period’ to end September 2013, the board agreed it would review all acting arrangements upon appointment of a new chief executive officer or in June 2013 (whichever occurred sooner) and that both Tony O’Neill and Srinivasan Venkatakrishnan would be offered the option to return to their normal positions post appointment of a new chief executive officer or have the alternative to exit the company at the end of September 2013. Their notice periods would revert back to the standard notice period after September 2013.

Remuneration policy

The remuneration policy is designed to allow us to compete in a global market where growth and scarcity of key skills remain an obstacle. The focus is therefore to attract and retain these key skills whilst recognising that cost and shareholder value are fundamental drivers of the policy delivery.

Linking pay and performance for our executives is important and by having a large portion of the executive pay defined as at risk pay we are ensuring that they are directly aligned to the overall performance of the company, the regions and the business units and have an overriding focus on safety as a large portion of their variable pay is directly linked to keeping our employees safe.

Benchmarking

Our executives and non-executives are benchmarked against a global group of competitors. AngloGold Ashanti’s size and complexity as well as each individual executive’s role and personal performance are reviewed annually against the benchmark group from a base pay, benefits, guaranteed pay and variable pay perspective. The 2012 bespoke benchmark survey was completed by GRS/Mercer. For the 2013 annual increases (awarded effectively January 2013) the benchmark group has been modified, following on shareholder feedback, to a slightly smaller peer group of companies (11) that are more similar to AngloGold Ashanti in size and geographic spread.

Our salary benchmarks are targeted at the market median; where there is a shortage of specialist and/or key technical skills higher than the benchmark median is paid, typically targeting the 75th percentile.

Each executive’s role is individually sized to ensure the best match possible. The comparison is done on the same or similar roles irrespective of place of work (including a review of purchasing power parity between countries). As a result of most organisations not doing matching by Stratum levels, we match each of the executive roles based on their individual role descriptions, using the Mercer Survey methodology known as international position evaluation (IPE). These roles are then matched directly to the survey participant data individually by doing direct market role comparisons.

The IPE system assists in comparing the data across different company sizes and the data can be analysed to a detailed level.

Each component of remuneration (base salary, short-term incentives, long-term incentives and benefits) is analysed and compared with the benchmarks and the overall package is reviewed accordingly.

Total reward

Over the past few years, the demand for executives with mining-related skills and experience has increased. Fewer people have entered the mining industry globally which limits the talent supply. The company operates in a highly competitive market for executives and the attraction and retention of talented and experienced executives is one of the key objectives of the executive remuneration approach. AngloGold Ashanti has designed its executive remuneration programme to emphasize performance-based incentives that reward its executives for the achievement of specific annual, medium and long-term business goals.

Executives have the following components of remuneration which take into consideration the global market, internal peerage, and regional and local legislative requirements:

Base salary

The base salary forms an essential part of the remuneration mix of executives as it is the base measure to compare and to remain competitive relative to peer companies. The base salary is used as the basis to determine other elements of compensation and benefits. The base salary provides the executive with remuneration that is not ‘at risk’. The following factors with regards to the executive base pay are important to note:

  • Annual increases for our executives are effective 1 January each year;
  • The executive base salary is targeted at the 50th percentile of the specific role as measured on the job sizing (IPE) methodology, but can vary depending on individual performance level and retention concerns; and
  • The Chief Executive Officer does not make a recommendation with respect to his own salary or any other component of his overall remuneration (although he makes recommendations on the rest of the executive team).

For the year ended 31 December 2012, the following adjustments were made to annual base salaries in accordance with the Remuneration Committee’s (Remco) remuneration policy and considerations in terms of market and peer alignment described above. On a whole the majority of our executives are well aligned to market on base pay but where this is not the case and there are other issues such as retention concerns, higher increases than CPI and market have been granted.

Surname 2011
Base salary (1)
2012
Base salary (1)
% Increase
I Boninelli (2) R4,417,595 R4,748,916 7.5%
CE Carter (2) R5,111,534 R5,494,896 7.5%
M Cutifani (2) R12,594,410 R13,601,964 8.0%
RN Duffy (2) R5,168,587 R6,073,104 17.5%
GJ Ehm AUD575,796 AUD665,044 15.5%
RW Largent (3) $663,672 $868,747 30.9%
M Macfarlane (4) CAD493,784
D Noko (2) (4) R4,500,000
MP O’Hare (2) (3) R4,425,391 R5,979,812 35.1%
AM O’Neill AUD1,287,108 AUD1,357,899 5.5%
ME Sanz Perez (2) (3) R3,031,829 R4,085,393 34.8%
YZ Simelane (2) R3,192,85 (2) R3,432,324 7.5%
S Venkatakrishnan (2) R7,562,949 R8,394,888 11.0%
  1. (1) Represents a full year salary, irrespective of whether the executive only worked a portion of the year.
  2. (2) South Africa-based executives have a portion of their base salary delivered through the Isle of Man; based on South African tax laws, this remains taxable in South Africa.
  3. (3) Interim increases were approved and granted by Remco in terms of market alignment.
  4. (4) Appointed during the course of the year.
Benefits

AngloGold Ashanti’s policy is to provide, where appropriate, through third-parties additional elements of compensation listed below:

  • The executives are eligible for participation in the retirement scheme applicable to the respective region. The company and the employee (in most instances) provide contributions towards retirement savings;
  • AngloGold Ashanti provides medical aid assistance through either a percentage of contribution, reimbursement or company provided clinics and health care providers;
  • Life Assurance is provided as a fixed amount or a multiple of base salary;
  • Disability insurance which comprises an amount to partially replace lost compensation during a period of medical incapacity or disability is provided to all executives; and
  • Accidental death and dismemberment cover is provided.
Short-term incentives

The short-term incentive, known as the Bonus Share Plan (BSP) is part of the variable element of the total reward package. The BSP is designed to reward the executives for the overall annual performance of the company. It consists of an annual performance-based cash incentive bonus and a matching share award (equity bonus) with deferred vesting. The vesting is over a two-year period, with 40% vesting after 12 months, 60% vesting after 24 months and an additional 20% retention award for remaining in service and holding the shares for a full 36 months.

The cash portion of the bonus may not exceed 50% of the BSP award allocated per level and the matching shares together with the cash bonus may never exceed the maximum cap per job level.

Each employee has bonus targets based on specific objectives that have to be achieved each year. Two factors are considered when determining these target bonuses for executives. The first is the company performance against a specific set of company targets set by the Remuneration Committee and the second is the individual performance of each executive. The table below summarises the target and maximum bonuses achievable as well as the split between company and individual performance weightings for the 2012 performance year:

Short-term incentives Targeted cash bonus as a % of salary Maximum cash bonus as a % of salary Total* targeted award as a % of salary Total* maximum award as a% of salary Company performance weighting as a % of salary Individual performance weighting as a % of salary
Chief Executive Officer 40% 80% 80% 160% 70% 30%
Chief Financial Officer 35% 70% 70% 140% 60% 40%
Executive management 30% 60% 60% 120% 60% 40%
  1. * Including bonus shares.

The company performance portion of the cash bonus is calculated using a fixed formula on achievement against the performance criteria (see table below), which is then put forward by the Chief Executive Officer to the Remuneration Committee (and board in the case of the Chief Executive Officer).

The performance measures used in 2012 for the company performance are indicated below with the weightings for each criterion. Delivery on target will result in a 50% payment of the cash bonus. A safety multiplier is applied once the bonus score has been calculated; this can either reduce or increase the final bonus score by up to 20%. The overall maximum cap per job level will apply.

Performance measure 2012 Weighting
Adjusted headline earnings per share 25%
Gold production 25%
Total cash cost 25%
Reserve conversion 25%
Safety as an incremental driver ±20% multiplier on the base calculation

Achievement against company performance targets for the 2012 performance year was 6.44%, as compared with 80.82% in 2011 when target achievement was significantly higher.

The achievement against each performance criteria is indicated below:

Performance measure Target Achieved Qualifying threshold % Achieved Max points achievable Points awarded
Adjusted headline earnings per            
share (US cents) 305 222 85% 72.8% 20
Gold production (000oz) 4,470 3,944 85% 88.2% 20 4.30
Total cash costs ($/oz) $720 $862 up to 110% (20%) 20
Reserve conversion 5Moz 3.2Moz 85% 64% 20
Subtotal         80 4.30
Safety multiplier 9.76 7.72 80% 32.2% improvement 20% 20%
Total company performance points           5.16
Company performance percentage (points divided by subtotal (80))       6.44%    

Cash payments, equal in value to the dividends which would have been paid had actual shares been issued during the vesting period, were made when the BSP awards granted in 2009, 2010 and 2011 vested during 2012.

2013 changes to the BSP scheme

On reviewing the BSP scheme and after extensive engagement with shareholders and an independent remuneration consultant, the measures of the scheme have been modified to be better aligned to both employee and shareholder interests. The following changes have been approved and will apply from 2013 onwards. The previously allocated awards, structure and metrics will remain unchanged.

Matching and vesting

Currently, the vesting is over a two-year period, with 40% vesting after 12 months, 60% vesting after 24 months and an additional 20% retention award for holding the shares for a full 36 months. This has been changed to vest 50% after 12 months and 50% after 24 months. The additional 20% retention award for holding the shares for 36 months falls away, and is replaced by the matching shares being 120% as opposed to 100% (no increase on the previous design). For executives, the same principle will apply but the matching will be 150%. See example below for how this impacts for a typical executive.

Example 1: On target earnings
Measures 2012 Current 2013 New Notes Impact of changes
EVP cash bonus 30% 30% Of salary Remains unchanged
Plus BSP shares 36% 45% % of cash bonus 9% increase
Total incentive award 66% 75% Of base salary 9% increase on target
Example 2: Maximum earnings
Measures 2012 Current 2013 New Notes Impact of changes
EVP cash bonus 60% 60% Of salary Remains unchanged
Plus BSP shares 72% 90% % of cash bonus 18% increase
Total incentive award 132% 150% Of base salary 18% increase on maximum

The maximums for cash bonuses remain unaltered and the new maximums for matching shares are indicated below:

Short term incentives Targeted cash bonus as a % of salary Maximum cash bonus as a % of salary Total* targeted award as a % of salary Total* maximum award as a % of salary Company performance weighting as a % of salary Individual performance weighting as a % of salary
Chief Executive Officer 40% 80% 100% 200% 70% 30%
Chief Financial Officer 35% 70% 87.5% 175% 60% 40%
Executive management 30% 60% 75% 150% 60% 40%
  1. * Including bonus shares.
New performance measures
Performance measure Weighting 2013
Reserve conversion 20%
Gold production 30%
Cash cost (including SIB, ORD and corporate cost) 30%
Adjusted headline earnings per share 20%
Safety as an incremental driver ±25% multiplier on the base calculation

The weightings for production and cash cost measures have been increased and cash cost is defined below:

The total cash cost performance measure includes stay-in-business (SIB) capital, Ore Reserve Development (ORD) and corporate costs. Total cash cost going forward is to be measured in US$ million and not per unit, as production performance is measured separately.

The multiplier for safety has been increased to 25% as safety has been removed from the LTIP measure since safety performance is measured over a three-year rolling average for BSPs and LTIPs also track three-year performance.

Minimum payment threshold

A minimum threshold as approved by the Remuneration Committee will have to be achieved on adjusted headline earnings to qualify for the payment of bonuses to staff; anything below this will result in no bonuses being paid on either company or individual performance across all regions.

Retention

An additional rule change to support retention has been included where an executive wishing to resign or to take early retirement in exchange for a stay period may be nominated to retain BSP shares post retirement/termination. These awards will be granted in line with the rules, but will vest in line with the standard vesting dates even where these are post the executive’s retirement/termination.

Long-term incentives

All executives participate in the LTIP. The objective of the LTIP is to align the interests of the company, shareholders and executive management over the medium to long term.

Under the LTIP, the executive management is granted the right to receive shares in the company subject firstly to performance conditions achieved over specific performance periods and secondly to continued employment within the group. The LTIP has a three-year vesting period from date of grant.

The value of the awards that are typically granted under the LTIP as a percentage of base salary is shown in the table below (for these purposes basic salary includes offshore payments).

Role LTIP allocation as a % of basic salary
Chief Executive Officer 160 – 200
Chief Financial Officer 140
Executive management* 100
Senior management 80
Other management (discretionary) 60
  • * As a result of the resignation of the Chief Executive Officer, to ensure the retention of the Executive Committee, the board has approved a 140% allocation to executive management for 2013.

The maximum award for any executive is capped at 200% of base salary in any financial year.

The LTIP awards granted in respect of the 2012 financial year, issued in 2013 to executive management, are disclosed below, under Number of options and awards granted.

The LTIP 2010 allocation vests in 2013 at 41.1% as the performance conditions were not fully met (see table below).

Performance condition % achieved
Adjusted headline earnings per share (AHEPS) (Target was met with adjusted headline earnings per share growing  
by 15.96% and the US CPI increasing by 6.32%) 21.1%
Total shareholder returns (TSR) (Target not met) 0%
Safety (The safety target was not met) 0%
Replacement of reserves (Full vesting as the target was met) 20.0%
Total LTIP award performance percentage achieved 41.1%
LTIP vesting percentage per year % [Graph]

In terms of the LTIPs granted to date vesting is summarised as follows:

At the discretion of the Remuneration Committee, a cash payment, equal in value to the dividends which would have been paid had actual shares been issued during the vesting period, will be made to employees to whom LTIP awards were granted, to the extent that these LTIP awards vest after the performance conditions have been met.

2013 changes to the LTIP scheme

On reviewing the LTIP scheme and after extensive engagement with shareholders and an independent remuneration consultant, the measures of the scheme have been modified to be better aligned to both employee and shareholder interest. The following changes were approved in March 2013 and will apply for 2013 onwards (the previous allocations metrics remain unchanged).

Revised performance measures under 2013 changes to LTIP
1. Total shareholder return (TSR) (50% weighting)

Performance will be measured on an absolute and relative level (weighted 25% each) against the enlarged defined comparator group of Barrick, Gold Fields, Harmony, Kinross, Newmont, Goldcorp, Gold ETF (World Gold Council SPDR classification) and Randgold Resources. On the absolute ranking, vesting will only occur when ranking in the top 2 quartiles. On the relative ranking, vesting will only occur when performing against or better than the average TSR of the comparator group by a defined % margin.

2.Reserve and resource ounce generation pre-depletion (15% weighting)

For full vesting, the company must achieve a measured and indicated resource of between 21Moz - 27Moz (3x7-9) and published reserves, pre-depletion, of 9 - 15Moz (3x3-5) over a three-year period. For partial vesting, the numbers are adjusted to 21Moz (3x7) and 9Moz (3x3) respectively.

3.Cash flow from operations (15% weighting)

AngloGold Ashanti should meet the budget for free cash flow generated from operations before project capital.

4.Project delivery (20% weighting)

The project delivery matrix will be defined by a capital projects steering committee with measurement based on schedule, capital, safety and quality performance against published project parameters and as verified by an independent body.

Retention

An additional rule change to support retention has been included where an executive wanting to resign or to retire early may on nomination of the Remuneration Committee and in exchange for a stay period retain LTIP shares post retirement or termination. These awards will be granted in line with the rules, but will vest in line with the standard vesting post the executive’s retirement or termination and in accordance with the same performance criteria.

Share Retention Bonus Scheme

Following the announcement of the resignation of the Chief Executive Officer (CEO), Mark Cutifani, it was felt necessary to put in place retention measures to ensure that members of the Executive Committee remain employed for at least the first 18 months after the CEO’s departure so as to ensure that the business has much needed continuity. Executives will therefore receive an additional ad-hoc incentive comprising an LTIP award in March 2013 and a deferred cash portion to be delivered in August 2014. This award is specifically to address the retention of executive management.

The Share Retention Bonus Scheme will be a performance-based share granted in March 2013, equivalent to 60% of the executive’s base pay as at 1 January 2013. Subject to the performance criteria, these shares will vest at the end of August 2014.

The cash portion will be 40% of the executive’s base pay (80% for the CFO) based on the January 2013 total base pay (inclusive of off-shore payments where applicable) and will be delivered at the end of August 2014, based on the meeting of performance criteria.

The scheme will be subject to delivery on key business imperatives and on delivery of adjusted headline earnings above a threshold of 50% of the approved targeted adjusted headline earnings over the performance period.

Missing any of the performance criteria will result in forfeiture of the retention bonus. There will be no pro rata calculation of the bonus, except when an executive is asked to leave the company as a “good leaver”.

Minimum shareholding requirement for executives

With effect from March 2013, a minimum shareholding requirement (MSR) will be applicable to all executives as indicated below:

Executive directors
  • Within three years of appointment (or for existing executives, from introduction of this rule) executive directors (CEO and CFO) are to accumulate an MSR of AngloGold Ashanti shares to the value of 100% of net annual base salary; and
  • At the end of six years, executive directors are to accumulate an MSR of AngloGold Ashanti shares to the value of 200% of net annual base salary (additional 100% MSR) which they will be required to hold on an on-going basis.
Executive Committee members
  • Within three years of appointment (or for existing executives, from the introduction of this rule), Executive Committee members are to accumulate an MSR of AngloGold Ashanti shares to the value of 75% of net annual base salary; and
  • At the end of six years, Executive Committee members are to accumulate an MSR of AngloGold Ashanti shares to the value of 150% of net annual base salary (additional 75% MSR) which they will be required to hold on an on-going basis.
Co-Investment Executive Share Plan

To assist executives in meeting their MSR’s, with effect from February 2013, they were given the opportunity, on a voluntary basis, to participate in the Co-Investment Plan (CIP), this has been adopted on the conditions below:

Executives will be allowed to take up to 50% of their after tax cash bonus to participate in a further matching scheme by purchasing shares in AngloGold Ashanti, and the company will match their initial investment into the scheme at 150%, with vesting over a two-year period in two equal tranches.

The illustration below depicts the impact of the share scheme changes on target earnings for a typical executive:

Measures 2012 Current 2013 New Notes Impact of changes
EVP cash bonus 30% 30% Of salary Remains unchanged
Plus BSP shares 36% 45% % of cash bonus 9% increase
Plus CIP matching shares 7% Based on 25% of after tax bonus 7% increase
Plus LTIP 60% 60% On target LTIP  
Total incentive award 126% 142% Of base salary 16% increase on target
Retention share award 60%    
Retention cash 40%    

The illustration below depicts the impact on maximum earnings for a typical executive:

Measures 2012 Current 2013 New Notes Impact of changes
EVP cash bonus 60% 60% Of salary Remains unchanged
Plus BSP shares 72% 90% % of cash bonus 18% increase
Plus CIP matching shares 27% Based on 50% of after tax bonus 27% increase
Plus LTIP 100% 100% Maximum LTIP  
Total incentive award 232% 277% Of base salary Maximum 45% increase
Retention share award 60%    
Retention cash 40%    

Remuneration mix

For 2012, the overall remuneration mix of executives was as follows:

Breakdown of executive remuneration mix % [Graph]

Note: The executive management column in the graph above represents the average mix for Executive Committee members.

Executive directors’ and prescribed officers’ remuneration

  Appointed with effect from Resigned/retired with effect from Salary (1) Performance related payments (2) Pension scheme benefits Other benefits & encashed leave (3) Sub total Pre-tax gain  on share options Total USD Total
SA rands (000)           2012       $ (000) (8)
M Cutifani Full year   14,041 2,939 2,879 466 20,325 22,946(11) 43,271 5,279
S Venkatakrishnan (5) Full year   8,708 2,577 1,711 4,277 17,273 18,713(11) 35,986 4,391
Total executive directors     22,749 5,516 4,590 4,743 37,598 41,659 79,257 9,670
Prescribed officers                    
I Boninelli Full year   4,841 965 505 27 6,338 6,338 773
CE Carter (5) Full year   5,601 1,281 584 2,388 9,854 8,674(11) 18,528 2,261
RN Duffy (5) Full year   6,191 869 1,211 2,669 10,940 10,940 1,335
GJ Ehm (5) Full year   5,641 977 510 1,435 8,563 8,563 1,045
RW Largent (5) Full year   6,779 1,447 1,565 2,920 12,711 14,023 26,733 3,262
RL Lazare (5, 6)   31-Mar-12 1,419 2,626 245 3,067 7,357 10,184 17,541 2,140
M MacFarlane (4) 01-Jun-12   3,108 346 219 2 3,675 3,675 448
DC Noko (10) 15-Jun-12   2,446 455 306 2,256 5,463 5,463 667
MP O’Hare Full year   5,634 1,035 1,101 391 8,161 8,161 996
AM O’Neill (5) Full year   11,911 2,686 318 2,101 17,016 17,016 2,076
ME Sanz Perez (7) Full year   3,945 830 411 789 5,975 5,975 729
YZ Simelane Full year   3,496 594 684 111 4,885 4,885 596
Total prescribed officers     61,012 14,111 7,659 18,156 100,938 32,880 133,818 16,328
Total executive director and executive management remuneration 2012   83,761 19,627 12,249 22,899 138,536 74,539 213,075 25,998
                     
SA rands (000)           2011       $ (000) (9)
M Cutifani Full year   12,591 8,345 2,298 4,602 27,836 27,836 3,836
S Venkatakrishnan (5) Full year   7,792 4,420 1,185 2,982 16,379 16,379 2,257
Total executive directors     20,383 12,765 3,483 7,584 44,215 44,215 6,093
Prescribed officers                    
I Boninelli 01-Nov-11   749 2,346 78 6 3,179 3,179 438
CE Carter (5) Full year   5,112 2,407 547 1,459 9,525 2,562 12,087 1,666
RN Duffy (5) Full year   5,168 2,434 1,070 1,609 10,281 1,246 11,527 1,588
GJ Ehm (5) Full year   4,251 2,027 604 2,369 9,251 6,042 15,293 2,107
RW Largent (5) Full year   4,871 2,268 308 1,881 9,328 9,328 1,285
RL Lazare (5, 6) Full year   5,134 4,601 1,001 4,116 14,852 7,261 22,113 3,047
MP O’Hare 01-Jun-11   2,594 2,084 518 3,877 9,073 2,060 11,133 1,534
AM O’Neill (5) Full year   11,670 4,530 955 1,096 18,251 18,251 2,515
ME Sanz Perez 13-Jun-11   1,687 1,428 176 767 4,058 4,058 559
TML Setiloane   31-Aug-11 2,817 1,165 304 1,426 5,712 5,712 787
YZ Simelane Full year   3,192 1,408 605 168 5,373 5,227 10,600 1,461
Total prescribed officers     47,245 26,698 6,166 18,774 98,883 24,398 123,281 16,987
Total executive director and executive management remuneration 2011   67,628 39,463 9,649 26,358 143,098 24,398 167,496 23,080
  1. (1) Salaries are disclosed only for the period from or to which office is held.
  2. (2) The performance related payments calculated on the year’s financial results.
  3. (3) Includes health care and personal travel. Surplus leave days accrued are automatically encashed unless work requirements allow for carry over.
  4. (4) M MacFarlane commutes between Canada and South Africa and the company carries the cost of flights and hotel accommodation in South Africa, these are excluded for reporting purposes.
  5. (5) Received retention bonus.
  6. (6) Cash paid in lieu of LTIP for 2012.
  7. (7) Received the remainder of sign-on bonus in July 2012 (paid over 24 months).
  8. (8) 2012 values have been converted using the average annual exchange rate of 8.1961.
  9. (9) 2011 values have been converted using the average annual exchange rate of 7.2569.
  10. (10) Received a sign-on bonus. Number of options and awards granted
  11. (11) These executives and prescribed officer applied all of the after tax proceeds from the sale of their options to acquire ordinary shares in AngloGold Ashanti as follows: Messrs Cutifani 51,692; Venkatakrishnan 42,157; and Carter 19,541.

Number of options and awards granted
  Balance at 1 January 2012 Granted during 2012 Exercised during 2012 Pre-tax gains on share options exercised ($000) Lapsed during 2012 Balance2012 (5)
Executive directors            
M Cutifani 258,210 112,183 86,293 2,800 12,209 271,891
S Venkatakrishnan 160,966 52,176 70,375 2,283 6,372 136,395
Total executive directors 419,176 164,359 156,668 5,083 18,581 408,286
Prescribed officers (1)            
I Boninelli 8,568 21,590 30,158
CE Carter 76,627 25,507 32,621 1,058 3,182 66,331
RN Duffy 85,394 27,790 3,536 109,648
GJ Ehm 48,845 22,286 2,660 68,471
RW Largent 88,331 26,083 52,069 1,711 6,139 56,206
RL Lazare (4) 41,573 1,901 34,279 1,243 9,195
MP O’Hare 54,281 22,809 2,471 74,619
M MacFarlane (2)
AM O’Neill 108,544 45,512 3,943 150,113
D Noko (3)
ME Sanz Perez 8,406 13,387 21,793
YZ Simelane 32,008 13,350 2,389 42,969
Total prescribed officers 552,577 220,215 118,969 4,012 33,515 620,308
Other management 3,006,829 1,592,126 670,004 23,155 377,216 3,551,735
Total share incentive scheme 3,978,582 1,976,700 945,641 32,250 429,312 4,580,329
  1. (1) Pursuant to the South African Companies Act 71, of 2008 (as amended), which came into effect on 1 May 2011, companies are required to identify and disclose the remuneration for the prescribed officers of the company.
  2. (2) M MacFarlane was appointed to the Executive Committee with effect from 1 June 2012 and therefore has no holdings/grants to date.
  3. (3) D Noko was appointed to the Executive Committee with effect from 15 June 2012 and therefore has no holdings/grants to date.
  4. (4) RL Lazare retired from the company with effect from 31 March 2012.
  5. (5) The latest expiry date of all options/awards granted and outstanding at 31 December 2012, is 21 February 2022.

No options/awards have been exercised by executive directors and prescribed officers subsequent to year-end.

A total of 1,264,872 options/awards out of the 4,580,329 options/awards granted and outstanding at 31 December 2012 are fully vested.

Awards granted since 2005 have been granted at nil cost to participants.

Non-executive directors are not eligible to participate in the share incentive scheme.:

Awards granted in respect of the previous year's financial results:
  Total (1) Value ($000) Total (2) Value ($000) (3) Total Value ($000) (3)
Issued in 2013   2012   2011  
Executive directors            
M Cutifani 5,429 148 112,183 4,481 86,789 3,988
S Venkatakrishnan 99,043 2,736 52,176 2,079 47,943 2,190
Total executive directors 104,472 2,884 164,359 6,560 134,732 6,178
Prescribed officers            
I Boninelli 52,314 1,445 21,590 866 8,568 401
CE Carter 66,929 1,849 25,507 1,016 23,300 1,073
RN Duffy 65,193 1,801 27,790 1,106 21,950 1,010
GJ Ehm 59,443 1,642 22,286 889 18,702 862
RW Largent (6) 76,865 2,124 26,083 1,038 22,730 1,046
RL Lazare (4) 1,901 68
MP O’Hare 66,699 1,843 22,809 912 12,852 600
M MacFarlane 42,765 1,182
AM O’Neill 124,961 3,452 45,512 1,821 41,528 1,882
D Noko 45,334 1,253
ME Sanz Perez 46,087 1,273 13,387 537 8,406 331
TML Setiloane (5) 1,263 45 5,357 247
YZ Simelane 36,218 1,001 13,350 532 12,085 563
Total prescribed officers 682,808 18,865 221,478 8,830 175,478 8,015
Total awards to executive management 787,280 21,749 385,837 15,390 310,210 14,193
  1. (1) Includes awards granted in respect of the 20% top-up for the 2010 BSP awards, 2013 BSP matching award and 2013 LTIP (inclusive of the 60% share retention bonus award, the 40% deferred cash portion will be reported in the year of payment i.e. 2014).
  2. (2) Includes awards granted in respect of the 20% top-up for the 2009 BSP awards.
  3. (3) The 2011 and 2012 values have been converted using the average exchange rates of 7.26 and 8.20 respectively.
  4. (4) Ceased to be a prescribed officer with effect from 31 March 2012.
  5. (5) Ceased to be a prescribed officer with effect from 31 August 2011.
  6. (6) Received a cash payment in lieu of the 2010 BSP top-up due to US tax restrictions.

Non-executive director remuneration

The table below details the fees and allowances paid to non-executive directors:

Non-executive director fees and allowances
  Director fees Committee fees Travel allowance Total Director fees Committee fees Travel allowance Total
All figures stated to
the nearest 000 (1)
  2012 US dollars     2011 US dollars  
TT Mboweni (chairman) 293 64 357 245 57 302
TJ Motlatsi
(retired 17 February 2011) (2)
22 14 36
FB Arisman 85 130 36 251 76 132 50 258
R Gasant 67 51 118 50 52 102
NP January-Bardill 67 79 146 11 6 17
MJ Kirkwood 47 20 27 94
WA Nairn 64 114 178 45 101 146
LW Nkuhlu 60 118 178 50 85 135
F Ohene-Kena 55 40 23 118 41 43 27 111
SM Pityana 64 111 175 43 94 137
RJ Ruston 81 63 45 189
Total (3) 883 790 131 1,804 583 584 77 1,244
  1. (1) Directors’ compensation is in dollars, the amounts reflected are the values calculated using the exchange rate of R7.2569:$1.
  2. (2) Fees are disclosed only for the period from or to which, office is held.
  3. (3) At the annual general meeting of shareholders held on 10 May 2012, shareholders approved an increase in directors’ fees with effect from 1 June 2012. Directors fees for committees may vary depending on the number of committees on which the non-executive director is a member and whether he/she is the chairman or a member of the committee.

Non-executive directors do not hold service contracts with the company. Executive directors do not receive payment of directors’ fees or committee fees.

The fees as approved by shareholders are shown below:

Non-executive director fees for six board meetings per annum
Board meetings Fees to 31 May 2012 per annum Fees from 1 June 2012 per annum
South African resident chairman R1,672,330
Chairman $251,325
South African resident director R310,500 $57,762
Non-South African resident director who is resident in Africa $42,188 $57,762
Non-South African resident director who is resident in jurisdictions other than Africa $66,000 $69,000
Allowance for attendance at additional board meetings

Each non-executive director is entitled to an allowance for each board meeting attended by such director, in addition to the six scheduled board meetings per annum, as follows:

Board meetings Fees to 31 May 2012 per meeting Fees from 1 June 2012 per meeting
South African resident chairman R85,800
Chairman $12,894
South African resident director R18,400 $3,465
Non-South African resident director who is resident in Africa $2,500 $3,465
Non-South African resident director who is resident in jurisdictions other than Africa $3,300 $3,465
Travel allowance

Each non-executive director who is not in South Africa and who travels to attend board meetings is entitled to receive a travel allowance on the basis set out below. In addition to the travel allowance payable, the company will cover all accommodation and sundry costs. The travel allowance for directors outside South Africa who attend board meetings is as follows:

Additional board meetings Fees to 31 May 2012 per meeting Fees from 1 June 2012 per meeting
South African resident director
Non-South African resident director who is resident in Africa $7,500 $7,800
Non-South African resident director who is resident in jurisdictions other than Africa $8,800 $9,152
Board committee fees payable to non-executive directors

The fee paid to each non-executive director in respect of such director’s membership of a committee of the board is as follows:

Board committee Fees to 31 May 2012 per annum Fees from 1 June 2012 per annum
Audit and Corporate Governance Committee    
Chairman – South African resident R184,000 $30,000
Member – South African resident R155,250 $21,393
Member – Non-South African resident director who is resident in Africa $21,094 $21,393
Member – Non-South African resident director who is resident in jurisdictions other than Africa $27,847 $27,847
Remuneration Committee    
Chairman – South Africa $26,000
Member – South African $17,730
Member – African $17,730
Member – Other than Africa $22,000
Other committees (being Investment, Safety, Health and Sustainable Development,Transformation and Human Resource Development, Risk and Information Integrity,Social, Ethics and Transformation Committee and such other committees of theboard as may be established from time to time)    
Chairman – South African resident R149,500
Chairman – South Africa and African $20,601
Chairman – Non-South African resident who is resident in Africa $20,313
Chairman – Non-South African resident who is resident in jurisdictions other than Africa $27,500 $27,500
Member – South African resident R126,500 $17,432
Member – Non-South African resident who is resident in Africa $17,188 $17,432
Member – Non-South African resident who is resident in jurisdictions other than Africa $22,000 $22,000
Fees payable for attendance at ad hoc meetings

Each non-executive director will be entitled to an allowance for each board committee meeting attended by such director in respect of those committees which meet on an ad hoc basis, including, the Financial Analysis Committee, the Party Political Donations Committee, the Nominations Committee and any special purpose committee established by the board as follows:

Board committee and special purpose committee Fees to 31 May 2012 per meeting Fees from 1 June 2012 per meeting
South African resident director R18,630 $3,465
Non-South African resident who is resident in Africa $2,531 $3,465
Non-South African resident director who is resident in jurisdictions other than Africa $3,300 $3,465