REMUNERATION REPORT

REMUNERATION PHILOSOPHY

The overall purpose of remuneration in Nedbank Group is to attract, retain, motivate and reward high-performing and talented staff. Furthermore, the remuneration philosophy is aimed at encouraging sustainable long-term performance and at all times to align performance with the strategic direction and specific value drivers of the business, as well as the interests of stakeholders.

Nedbank Group has adopted a total-reward philosophy as part of an enterprisewide human resources (HR) strategy, which in turn supports the group’s business strategy. Total reward, comprising fixed and variable pay, reward and recognition, work-home balance, talent management, learning and development, and career development, also plays a critical role in attracting, motivating and retaining high-performing and talented individuals who are required to achieve Nedbank Group’s objectives. The total-reward approach within Nedbank Group is integrated into its people management processes, such as transformation, performance management, recognition, learning and development, and talent management.

The group’s market position is to pay for performance, while ensuring that there is a distribution of remuneration around the market median when performance is on par with predetermined financial and non-financial targets. Performance in excess of these financial targets is rewarded through additional incentives created through Nedbank Group’s short-term incentive (STI) scheme, as well as Nedbank Group’s recognition programme. Performance is measured at a group and business unit level against agreed targets after the finalisation of the year-end results. The financial results drive the creation of STI pools in the group and in each business unit. Distribution of these STI pools to individuals is on the basis of relative individual performance measured against agreed targets as stated in individual performance scorecards.

Nedbank Group’s long-term incentive (LTI) schemes are primarily aimed at the retention of key, high-impact employees. They are intended to provide a motivation for high performers to remain with Nedbank Group and also to align the interests of individuals with shareholders.

Nedbank Group does not use a generic grading structure. Instead, the bank benchmarks remuneration in terms of the roles employees are required to perform by comparison with the external market and in relation to individual performance. Information on external remuneration is critical to ensure that remuneration is market-related and substantial effort is made to ensure that market information is sourced from a number of different and credible remuneration surveys.

REMUNERATION COMMITTEE MEMBERSHIP AND CHARTER

The Group Remuneration Committee (the ‘committee’) operates according to a charter approved by the Nedbank Group Board. The board delegates responsibility to the committee for the investigation and benchmarking of remuneration practices and for considering and approving proposals made on remuneration practices for the group.

During 2008 the committee initially comprised four independent non-executive directors, namely JB Magwaza (Chairman), Chris Ball, Brian Figaji and Cedric Savage, and one non-executive director, Jim Sutcliffe. Mr Savage retired in May 2008 and Mr Sutcliffe resigned in September 2008. Bob Head, Regional Director, Old Mutual Europe, was appointed to the committee in October 2008.Tom Boardman, Chief Executive, Shirley Zinn, Group Executive: Human Resources, and Mike Brown, Chief Financial Officer, are permanent invitees to the committee meetings and recuse themselves from discussions on their own remuneration. The committee met six times during 2008.

The committee considers remuneration in an integrated and holistic manner, thereby assisting the board in discharging its corporate governance duties related to remuneration strategy, structure and costs.

The committee’s responsibilities include:

The committee applies the guiding principles of the remuneration policy as far as is feasible, but both the board and the committee retain the right to use their discretion to deviate from this policy in exceptional circumstances.

The committee provides the board with feedback on decisions taken after each meeting or more frequently, if deemed necessary.

A self-assessment of the committee was conducted in July 2008 to evaluate the committee’s effectiveness against the objectives of the committee’s charter and to highlight and therefore focus on areas where its performance could be enhanced.

Overall, the results of the evaluation regarding the effectiveness of the committee were positive and indicated that the committee is functioning well. High-level feedback confirmed that:

An area of improvement relates to the communication between the committee and other shareholders and stakeholders.

The Chairman of the board, Dr Reuel Khoza, also completed an evaluation that confirmed his satisfaction with the performance of the committee.

Advisers to the committee

The committee is informed of market-related information on guaranteed packages (remuneration on a total cost-to-company basis), as well as short- and long-term incentives, based on a number of remuneration surveys in which the group participates. These include Remchannel, the GRS Top Executive Remuneration Survey, the LMO Executive Remuneration Survey, the Hay Investment Banking Survey and a number of smaller niche remuneration surveys. Specialists within the Group Remuneration Services Department collate and analyse the information sourced from external service providers and prepare documentation for consideration and approval by the committee. Where appropriate, the committee has access to independent executive remuneration consultants, and has utilised the services of Vasdex Associates and PricewaterhouseCoopers during the year. During 2008 Kevin Stacey, in his capacity as the Old Mutual plc remuneration specialist, provided the committee with input from the perspective of the Old Mutual plc Remuneration Committee.

Education of committee members

As part of the ongoing education of directors, a training session on the latest remuneration practices in Europe and the high-level principles on remuneration and incentive schemes in the other Old Mutual plc businesses was facilitated by Kevin Stacey.

Guaranteed-package increases

Annual increases in the guaranteed package are performance- and market-related, based on the projected rate of inflation, increases awarded by other major banks and the financial services industry, and the group’s remuneration position against the banking and financial services markets. To maintain appropriate remuneration competitiveness relative to the labour market remuneration is reviewed at least annually and annual increases take effect on 1 April.

Non-managerial employees form part of a bargaining unit, and annual increases granted for this grouping depend on negotiations with the recognised trade unions, SASBO and IBSA. In April 2008 the non-managerial remuneration bill was increased by 8,375% and the managerial and executive remuneration bill increased by 7,25%. Individual increases are granted on the basis of personal performance and market comparisons within the overall adjustment percentage.

Chief Executive Tom Boardman’s guaranteed package was reviewed in February 2008 and adjusted to R4 600 000 pa with effect from 1 April 2008. This increase took into account an annual increase in line with CPIX as well as a market adjustment based on his performance and remuneration levels relative to his peer group at the other major banks. Chief Financial Officer Mike Brown’s guaranteed package was reviewed and adjusted to R2 700 000 pa with effect from 1 April 2008 using the same CPIX performance and market-related criteria. These increases cover the period from 1 April 2008 to 31 March 2009.

Remuneration

All employees in the Nedbank Group are remunerated on a total cost-to-company basis (referred to in this report as ’the guaranteed package’), which includes a basic salary, 13th cheque (if selected), allowances and contributions to benefit funds. From the guaranteed package contributions are made to the Nedgroup Medical Aid Scheme, a postretirement medical aid fund (applicable only to qualifying employees), a retirement fund, a disability fund and a death benefit scheme. A car allowance/company car contribution may be structured into the package where the employee is required to travel on group business. The amounts stipulated under basic salary and other benefits in table 1 exclude the contributions to the retirement fund, but include contributions to the disability fund, the car allowance/ company car, medical aid and postretirement medical aid subsidy.

Retirement scheme

The executive directors are members of Nedbank’s defined-contribution retirement schemes. There are therefore no defined-benefit liabilities in respect of the executive directors. Contributions to the retirement funds form part of the guaranteed package.

Short-term incentives

Short-term incentives are intended to encourage particular behaviours and obtain desired results. Nedbank Group incentive schemes are structured to support collaborative work across different clusters. The committee has agreed a set of principles and all group and cluster incentive schemes are designed according to those principles.

The level of Nedbank Group’s economic profit (EP) in excess of the target for 2008 was the driver for the creation of the incentive pools for all support clusters and the group pool component for the income-generating clusters.

In the income-generating clusters incentive pools are structured with a weighting linked to the group, cluster and, where appropriate, divisional performance. The three income-generating clusters within Nedbank (Retail, Corporate and Capital) were measured against relevant EP targets, with these pools being calculated independently of one another. Independent calculations are done to ensure that the total amount calculated on the group’s EP performance and the amounts calculated taking into consideration each cluster’s and division’s independent performance do not differ by more than 5%. If the difference is more than 5%, the calculated group pool will be used. Distribution of these pools is based on individual performance relative to the agreed deliverables in the performance management process (performance scorecards for managers, senior managers and executives).

Executive remuneration is benchmarked to data provided in national executive remuneration surveys and information disclosed in annual financial statements. Executive bonuses are based on actual performance measured against agreed financial and non-financial targets as approved by the committee.

To align with the group’s three-year business plan targets, which are aligned with the group’s risk appetite as part of the planning process, the short-term incentives were aligned to EP in 2008.At a group level EP is calculated using International Financial Reporting Standards (IFRS) headline earnings and average shareholders’ funds together with an appropriate hurdle above the group’s cost of equity. Similar calculations are performed in the clusters using economic capital allocations and cluster-specific cost of equity estimates.

Deferred short-term incentive scheme

In 2006, in response to a buoyant labour market and a higher-than-normal staff turnover, a deferred short-term incentive (DSTI) scheme was approved and implemented for 337 employees, serving as a retention scheme. The Chief Executive and members of the Group Executive Committee were excluded from the 2006 scheme.An initial payment took place in October 2006 with a two-year lock-in period and the balance of the DSTI payment was paid in November 2008.The participants from Nedbank Capital were given a three-year lock-in with the final payment scheduled for November 2009. Employees who left the service of Nedbank before the attainment of the lock-in date were required to reimburse Nedbank the gross initial amount paid. The scheme achieved its key aim of retaining critical skills.

In 2008 Nedbank was in a situation where the retention of key staff again became increasingly challenging in a tougher financial services sector where these skills were in demand. In July 2008 the committee approved a further retention scheme to be used for key staff and at 31 December 2008, the scheme included 153 participants. The Chief Executive and members of the Group Executive Committee were also excluded from the 2008 scheme. An initial payment took place in October 2008 and the balance of the cash award will be paid in October 2011. Participants leaving the service of the group before the termination date of the scheme are required to reimburse Nedbank the gross initial amount paid.

EXECUTIVE DIRECTORS

Service contracts

In order to allow Tom Boardman to present the 2009 financial results his service contract was extended to 28 February 2010.The extension of the contract was agreed in January 2007. His service contract stipulates a maximum notice period of six months under most circumstances. A service contract was agreed with Mike Brown on 17 June 2004, with a notice period of six months under most circumstances and retirement age of 60 years.

Executive directors’ remuneration

The remuneration of executive directors for the years ended 31 December 2008 and 31 December 2007 was as follows:

Table 1: Executive directors’ remuneration – year to 31 December 2008

  Basic salary Retirement       2008-
  and other fund Guaranteed Performance   on-2007
  benefits* contributions remuneration bonus** Total change
Name (R000) (R000) (R000) (R000) (R000) (%)
TA Boardman 4 104 309 4 413 6 000*** 10 413 (11,5)
MWT Brown 2 282 319 2 601 3 250 5 851 (19,3)
             
Total 6 386 628 7 014 9 250 16 264 (14,5)
* This salary includes contributions to the medical aid, postretirement medical aid subsidy, disability insurance and car allowance/company car benefits structured into the package. No additional benefits are offered to executive directors.
** Bonus relates to performance in 2008, paid in March 2009.
*** The committee recommended a bonus of R6 624 million payable in cash to Mr TA Boardman. Following a request by Mr Boardman the committee amended the proposal to a cash bonus of R6 million and an additional allocation of restricted shares to the value of R624 000.The board accepted the committee’s revised proposal.
   
TA Boardman earned fees of R235 000 and R159 000 for board and committee membership of Mutual and Federal in 2008 and 2007, which fees were ceded to Nedbank Group.
 
Table 2: Executive directors’ remuneration – year to 31 December 2007
             
  Basic salary Retirement       2007-
  and other fund Guaranteed Performance   on-2006
  benefits* contributions remuneration bonus** Total change
Name (R000) (R000) (R000) (R000) (R000) (%)
TA Boardman 3 499 263 3 762 8 000 11 762 18,4
MWT Brown 1 974 276 2 250 5 000 7 250 15,8
             
Total 5 473 539 6 012 13 000 19 012 17,4
* This salary includes contributions to the medical aid, postretirement medical aid subsidy, disability insurance and car allowance/company car benefits structured into the package. No additional benefits are offered to executive directors.
** Bonus relates to performance in 2007, paid in March 2008.
A fully taxed refund of R128 686 relating to previous earnings was made to TA Boardman during 2007.
Performance bonus for executive directors
For both the Chief Executive and the Chief Financial Officer the performance bonus for 2008 was based on a combination of the level of group economic profit as well as performance against their individual performance scorecards.
 
The individual performance of Tom Boardman and that of Mike Brown is measured across five dimensions to determine their respective share of the bonus pool, namely financial, clients, internal processes, transformation and organisational learning. The specific objectives for each of these dimensions are as follows:
  • Financial – delivering sustainable financial outperformance.
  • Clients – investing for growth by expanding into the mass and middle markets, the public sector and business banking and implementing the three-tiered African strategy; improving Nedbank’s client relations by empowering our clients through delivery of affordable banking and finally leading as a corporate citizen.
  • Internal processes – enhancing productivity and execution, managing risk as an enabler, growing regulatory and government relationships and growing stakeholder relations.
  • Transformation – accelerating transformation in support of achieving the group’s transformation targets and objectives.
  • Organisational learning – building an innovative and differentiated culture and becoming an employer of choice by creating a great place to work.
Performance across all five of these dimensions in 2008 was solid in the light of market conditions. Targets across four of the major focus areas, ie clients, internal processes, transformation and organisational learning, were exceeded. Financial targets were largely met, but group economic profit declined compared with that of 2007, resulting in reduced bonus pools.This represents a resilient performance in the light of global conditions and compares favourably with that of our international and local peers.
Severance arrangements for executive directors
In the event of their services being terminated executive directors will be entitled to a severance package equal to two weeks’ guaranteed remuneration per completed year of defined operational service, with no maximum. In addition, executive directors are entitled to a maximum notice period of six months, during which they may or may not be required to work.
Non-executive directors’ remuneration
The terms of engagement of the non-executive directors (excluding the Chairman) cover a period of three years, as determined by the rotation requirements of the Nedbank Group articles of association. A non-executive director is required to retire at age 70.Any director serving for a period in excess of nine years is subjected to annual reelection at the annual general meeting.
The Chairman’s appointment was effective from 4 May 2006. In terms of the articles of association the chairman and vice-chairman are reelected annually by the board.
 
In October 2008 the boards of Nedbank Group and Nedbank Limited decided to withdraw the position of vice-chairman of the board following the creation of the post of senior independent non-executive director. As a result the Joint Vice-chairmen of the boards, Michael Katz and Lot Ndlovu, will formally step down from their positions at the annual general meeting on 14 May 2009 and will continue to serve as independent non-executive directors of the group. Chris Ball is the senior independent non-executive director.
 
Non-executive directors’ remuneration for the years ended 31 December 2008 and 31 December 2007 were as follows:
 
    Board Committee    
    meeting fees meeting fees 2008 2007
Name Note R000 R000 R000 R000
CJW Ball 1, 2 514 814 1 328 1 093
TCP Chikane   240 199 439 331
BE Davison b 141 167 308 461
N Dennis f       300
MA Enus-Brey 1 240 176 416 346
B de L Figaji   240 190 430 335
R Harris 4, e 240 86 326 10
RM Head 2, 4 354 210 564 584
MM Katz   240 395 635 550
RJ Khoza c   3 000 3 000 2 500
JB Magwaza 3 490 680 1 170 1 061
NP Mnxasana 1, g 124 49 173  
ME Mkwanazi   240 215 455 375
ML Ndlovu 2, d 354 995 1 349 2 258
CML Savage   88 76 164 361
GT Serobe 2, 5 494 77 571 535
JH Sutcliffe 4, a 166 69 235 270
Total   4 165 7 398 11 563 11 370
1    Includes fees for board, subsidiary board and committee memberships (including Imperial Bank) for the years 2007 and 2008.
2 Includes fees for board and committee memberships (including Mutual & Federal) for the years 2007 and 2008.
3 Includes fees for board and committee memberships (and additional services to Mutual & Federal) for the years 2007 and 2008.
4 Fees for RM Head and JH Sutcliffe and R Harris are paid to Old Mutual (SA) Limited for 2007 and 2008.
5 Includes fees for board and committee memberships (including Old Mutual Life Company South Africa) for the years 2007 and 2008.
a JH Sutcliffe has resigned as a non-executive director from the boards of Nedbank Group and Nedbank Limited with effect from 9 September 2008 following his resignation as Chief Executive of Old Mutual plc.
b BE Davison resigned as non-executive director with effect from 2 August 2008.
c From 1 January 2008 to 29 February 2008, RJ Khoza’s fees were paid directly to AKA Capital (Pty) Limited.
d As part of the negotiations to conclude the termination of ML Ndlovu’s services as a consultant to the Nedbank Group, it was agreed that he would receive a payment of R500 000 in 2008.
e R Harris was appointed as a non-executive director with effect from 10 December 2007.
f N Dennis resigned as an independent non-executive director effective 31 December 2007.
g NP Mnxasana was appointed as an independent non-executive director with effect from 1 October 2008.

The remuneration for non-executive directors for committee membership is as follows:

Committee Proposed        
       (with effect from   Annual fee**   Annual fee
          1 January 2009)***   2008   2007
Boards (R)   (R)   (R)
Chairman of the board* 3 300 000   3 000 000   2 500 000
Vice-chairmen premium **** 100 000   100 000    
Senior Independent Director***** 105 600   96 000    
Nedbank Group Limited 143 000   130 000   95 000
Nedbank Limited** 121 000   110 000   80 000
Committees          
Group Audit Committee** 114 000   105 000   96 000
Group Finance and Oversight Committee 20 000   20 000   30 000
Group Remuneration Committee** 64 800   60 000   55 000
Group Risk and Capital Management Committee** 90 000   75 000   60 000
Group Credit Committee 67 500   65 000   65 000
Group Directors’Affairs Committee 44 000   40 000   40 000
Board Strategic Innovation Management Committee** 42 000   40 000   35 000
Group Transformation and Sustainability Committee** 65 000   65 000   40 000
* The Nedbank Group Chairman’s fees include his fees for board, subsidiary board and committee memberships.
** At the annual general meeting held on 13 May 2008 approval was granted to increase non-executive directors’ fees in order to align the board fees with local market practices.
*** Subject to shareholders’ approval at the 2009 annual general meeting.
**** This function terminates at the close of the May 2009 annual general meeting.
***** A fee of 40% on the Nedbank Group Limited and Nedbank Limited Board member fee is paid to the Senior Independent Director.
 

Chairmen of committees (other than the Chairman of the Nedbank and Nedbank Group Directors’ Affairs Committee, who receives a set annual remuneration package) receive double the member fees. Fees payable to the non-executive directors and the Nedbank Group Chairman are reviewed annually and adjustments are considered by a subcommittee of the Remuneration Committee. The subcommittee recommended the above increases with effect from 1 January 2009.These were approved by the board, but are still subject to shareholder approval at the annual general meeting to be held on 14 May 2009. Committee meeting attendance is recorded in the Enterprise Governance and Compliance Report.

SHARE INCENTIVES

Share option/Restricted-share grants

Long-term incentives are intended to achieve two strategic objectives: to retain high-impact employees and provide long-term reward that is aligned with the interests of the shareholders. The value of the incentive issued is based on the most recent performance review, individual career path planning, scarcity of skills and the organisation’s need for retaining the individual. The value of the instrument allocated is benchmarked to the external market and overall affordability. During 2008 the committee elected to issue restricted shares as opposed to share options to eligible participants. In line with market best practice, the restricted shares were introduced with corporate performance targets.

On-appointment allocations (internal and external appointments)

On-appointment restricted share allocations are offered at the discretion of the committee to new senior management employees in addition to employees who have been appointed to more senior positions and have been recommended by the Group Executive Committee. On-appointment allocations take place three trading days after the announcement of the interim and annual financial results (in February and August), subject to the Nedbank Group Personal Account and Insider Trading Policy. The committee will determine annually whether performance-based vesting conditions will apply. The vesting period for on-appointment allocations is three years from the date of allocation, subject to the achievement of corporate performance targets.

Annual allocations

Annual restricted share allocations apply to qualifying employees in terms of criteria recommended by the Group Executive Committee and approved by the committee.

Annual allocations take place once a year (typically in February), subject to the Nedbank Group Personal Account and Insider Trading Policy. The committee will determine annually whether performance-based vesting conditions will apply in respect of the allocation to qualifying employees.

At 31 December 2008 share options and restricted shares in issue under the Nedbank employee schemes (vested and unvested), as a percentage of issued share capital, was 4,5% This is well within the maximum of the 10% provided by the scheme rules.

EMPLOYEE LONG-TERM INCENTIVE SCHEMES

2005 Nedbank Employee Share Scheme

This scheme consists of three parts:

1 Share Option Scheme
Share options can be issued to qualifying employees with or without performance conditions (as determined annually by the committee). No new share options were granted to employees in 2008.
2 Matched Share Scheme
The Matched Share Scheme allows employees an opportunity to allocate up to 50% of their after-tax bonus towards the acquisition of Nedbank Group shares or to deposit Nedbank Group shares to the equivalent value into the trust.The incentive to do so is a matching of this investment to the equivalent value by the 2005 Nedbank Employee Share Trust on a one-for-one basis. The trust’s obligation to deliver or procure the delivery of the matched shares rests on two conditions, namely that:
 
  • employees are still in the service of the group on the vesting date (three years after acquisition) for 50% of the matched shares; and
  • the group has met an agreed performance target over a three-year period for the remaining 50% of the matched shares.
  In May 2008 enhancements to the Matched Share Scheme were approved at the annual general meeting. The Matched Investment Plan (MIP) was approved as an enhanced scheme for participants, and the previous Matched Share Scheme was renamed the Bonus Share Scheme (the principles remain unchanged). The MIP was not offered to employees during 2008 due to the current economic climate. The committee retains the discretion to implement the MIP based on business and market conditions.
3    Restricted Share Plan
 During 2008 Nedbank granted restricted shares with time-based and performance–based vesting criteria.
 
   
  The Restricted Share Plan offers awards to new employees and internal appointments (on-appointment allocations) and annually to existing employees (annual allocations).
   
  Annual allocations were made to 1 141 employees on 3 March 2008. On-appointment allocations were made to 112 employees in total on 3 March 2008 and 11 August 2008.
   
  Where applicable, restricted shares will vest only if the predetermined financial targets are achieved. In the event of no performance targets applying time-based vesting criteria will apply.The committee agreed that a combination of the following three performance targets is to be used for the period 2008 – 2011 on a graduated scale of vesting: return on equity (ROE) (excluding goodwill), fully diluted headline earnings per share (HEPS) growth and the cost-to-income ratio. Employees granted restricted shares during 2008, which were initially subject to only an ROE (excluding goodwill) target, were given the option to elect the graduated vesting targets or retain on the ROE (excluding goodwill) target.All restricted shares allocated under this scheme will vest subject to the achievement of targets after three years from the date of allocation.As part of the Restricted Share Plan rules, participants are entitled to receive dividends.
   
  Restricted-share allocation price
  For purposes of the Restricted Share Plan the allocation is based on the weighted-average (by volume) market price of an ordinary share in the company, as shown by the official trading-price list published by JSE Limited (‘JSE’), over the three most recent trading days on JSE immediately preceding the allocation date.
   
  Phantom Share Plan
  During 2007 the committee approved the Phantom Share Plan (cash-settled) for key staff of the business in the United Kingdom.The scheme design principles mirror the South African LTI schemes as far as possible.A total of 14 United Kingdom employees participated in the scheme in 2008.
   
  Status of the share schemes
  1994 Nedcor Group Employee Incentive Scheme
  At 31 December 2008 there were 351 participants and 1 870 387 Nedbank Group share options outstanding, of which 47 911 were as a result of the rights issue grant linked to the underlying options during 2004. Of these share options outstanding 715 035 were issued with performance-based vesting criteria and 1 155 352 were time-based allocations.
   
  All corporate performance targets for share options issued in 2005 were met and hence all these share options vested.
   
 

2005 Nedbank Employee Share Trust

  At 31 December 2008 there were 1 172 participants and 14 083 839 Nedbank Group share options outstanding. All share options under this scheme were issued with time-based vesting criteria. The restricted-share allocations made in 2008 were also linked to the achievement of financial targets.A total of 2 516 999 restricted shares were issued in 2008.
   
  Matched Share Scheme
  The number of participants who have committed shares to the scheme at 31 December 2008 is noted below:
 
2008   2007   2006   2005
421   414   437   461

The number of shares held in the trust totals 595 170 shares.

NEDBANK EYETHU EMPLOYEE SCHEMES

Nedbank Group implemented its black economic empowerment (BEE) staff schemes in August 2005.The objective of the schemes is to support the achievement of Nedbank’s broad transformation strategy. The group has completed a project to ensure that the schemes also meet the requirements of the Department of Trade and Industry (dti) codes. A final audit to confirm that all the requirements have been met will be concluded in July 2009.

The Eyethu employee schemes consist of the Black Executive Trust, the Black Management Scheme, the Broad-based Scheme and the Evergreen Trust. Share and share option allocations have been made to new and internally appointed employees since the inception of the schemes, in accordance with the scheme rules and the respective trust deeds.

At 31 December 2008 a total of 42 black employees in senior positions with group-wide impact, as identified by the Group Executive Committee and approved by the committee and trustees, are beneficiaries of the Black Executive Trust.

Black permanent employees earning in excess of R325 654 per annum received new or top-up options and shares under the Black Management Scheme in the period under review.

At the 13 May 2008 AGM it was agreed that 2,4 million shares be transferred to the Black Management Scheme from the Nedbank Eyethu Retail Scheme in order to bolster the scheme for future allocations.

Shares under the Eyethu Broad-based Scheme were allocated as a once-off share grant to permanent Nedbank Group employees who met the eligibility criteria at the inception date of the scheme and no subsequent allocations were made. A trading restriction of five years applies to shares issued under this scheme.

The Evergreen Trust was created with the specific purpose of uplifting the living standards and personal circumstances of black permanent employees who meet certain eligibility criteria. In April 2009 55 beneficiaries will be completing their Grade 12 qualification equivalent to a NQF4.

NEDBANK EYETHU NON-EXECUTIVE DIRECTORS TRUST

This trust holds 900 966 shares. At 31 December 2008 a total of 654 068 shares were allocated to five participants.

On 3 March 2008 81 815 shares were allocated to TCP Chikane as a participant in the Nedbank Eyethu Non-Executive Directors Scheme.

At 28 October 2008 a total of 19 376 shares were allocated to TCP Chikane, B de L Figaji, JB Magwaza, ME Mkwanazi and ML Ndlovu, utilising the 2008 interim cash dividend in terms of the rules governing this scheme.

NEDBANK AFRICA SUBSIDIARY SCHEMES

During 2006 the committee approved the Omufima Employee Schemes for Nedbank Namibia. The committee approved localisation and LTI schemes in principle for Swaziland, Malawi, Zimbabwe and Lesotho during 2007.



Click to enlarge
Executive directors’ restricted shareholding (2008)*
    Restricted shares issued during 2008 Closing balance at December 2008
   Number of     Number of      
  restricted Date of Issue price   restricted Date of Issue price Vesting
Name shares issue (R)   shares issue (R) date
TA Boardman 60 167 03/03/2008 120,62   60 167 03/03/2008 120,62 04/03/2011
             60 167       60 167      
MWT Brown 38 613 03/03/2008 120,62   38 613 03/03/2008 120,62 04/03/2011
             38 613       38 613      
* Restricted shares issued with time- and performance-based vesting criteria. No accelerated vesting would apply to TA Boardman notwithstanding the fact that he retires in February 2010.

Shares purchased/committed by executive directors under the Matched Share Scheme for the period 2005 – 2008:
Name Number of shares Date of inception Strike price (R)
TA Boardman 15 098 02/06/2005+ 76,50
    10 000 28/03/2006 130,18
    20 000 31/03/2008 117,83
MWT Brown 9 803 02/06/2005+ 76,50
       7 400 28/03/2006 130,18
       8 878 27/03/2007 141,92
    13 155 31/03/2008 117,83
+ 100% of the ordinary shares were matched on 3 June 2008 in terms of the rules of the Nedbank Group (2005) Matched Share Scheme.
Directors’ interests

At 31 December 2008 the directors’ interests in ordinary shares in Nedbank Group were as follows:

      Beneficial       Non-beneficial
  Direct Indirect   Indirect
Number of shares 2008   2007   2008   2007   2008   2007
                       
CJW Ball 10 000   10 000                
TA Boardman 98 936   50 098   60 167            
MWT Brown 49 940   26 203   39 522   909        
TCP Chikane         86 912            
MA Enus-Brey*+         1 650   1 633**   546   546**
B de L Figaji*         114 579   107 928   2 296   2 296
R Harris                      
RM Head                      
MM Katz         4 826   4 682        
RJ Khoza*++         1 031   1 031   1 031   1 031
JB Magwaza* 160   160   114 529   107 878   549   549
ME Mkwanazi* 1 768   1 768   114 579   107 928   1 148   1 148
NP Mnxasana                      
ML Ndlovu         246 769   232 871        
GT Serobe*+++         972   972   2 458   2 458
Total 160 804   88 229   785 536   565 832   8 028   8 028
* Includes shares bought in terms of the Retail Eyethu Scheme by immediate family members.
** Shares awarded in 2007 (in terms of final dividend paid for 2006) are shown as being held beneficially indirect.
+ Excludes 4 353 200 and 4 662 678 shares held by The Brimstone-Mtha Financial Services Trust in 2007 and 2008 respectively.
++ Excludes 1 837 021 and 1 946 719 shares held by The Aka-Nedbank Eyethu Trust in 2007 and 2008 respectively. 
+++ Excludes 4 366 046 and 4 676 324 shares held by The Wiphold Financial Services Number Two Trust in 2007 and 2008 respectively.
   

Refer to the circular to ordinary shareholders issued on 15 June 2005 for further information relating to the abovementioned trusts.

None of the directors had any direct non-beneficial interest in the shares of the company during the year under review.

At 31 December 2008 the directors’ interests in the non-redeemable non-cumulative preference shares of R0,001 each in Nedbank Limited were as follows:

  Beneficial   Non-beneficial
  Direct   Indirect
Number of shares 2008   2007   2008   2007
CJW Ball 144 300   144 300        
TA Boardman         85 000   85 000
MWT Brown              
TCP Chikane              
B de L Figaji              
MA Enus-Brey              
R Harris              
RM Head              
MM Katz 165 000   475 000   105 000   105 000
RJ Khoza              
JB Magwaza              
ME Mkwanazi              
NP Mnxasana              
ML Ndlovu              
GT Serobe              
Total 309 300   619 300   190 000   190 000

None of the above directors had any beneficial indirect or non-beneficial direct interest in Nedbank preference shares during the year under review.

On 3 March 2009 altogether 99 340 restricted shares will be granted to TA Boardman with corporate performance targets in terms of the Nedbank Group (2005) Share Option, Matched and Restricted Share Scheme. Furthermore, on 3 March 2009 MWT Brown will be granted 118 827 restricted shares in terms of the Nedbank Group (2005) Share Option, Matched and Restricted Share Scheme. 52 812 restricted shares will be granted with corporate performance targets and 66 015 without corporate performance targets.

On 3 March 2009 NP Mnxasana will acquire 46 722 ordinary shares through the Nedbank Eyethu Non-executive Directors’ Scheme. There are 100 000 (2007: 437 934) options outstanding that have been granted to executive directors in terms of the Nedcor Group (1994) Employee Incentive Scheme and 422 765 (2007: 422 765) options outstanding that have been granted to executive directors in terms of the Nedbank Group (2005) Share Option, Matched Share and Restricted Share Scheme. Refer here.