19. Other reserves        
2020
R'm		   2019
R'm		  
Life Healthcare employee share trust 137   130  
Long-term incentive schemes 79   54  
Transactions with non-controlling interest reserve (959)   (851)  
Other¹ (44)   (31)  
(787)   (698)  
1 Comprise distributable reserves and retirement benefit asset and post-employment medical aid reserves.
Terms and conditions
  Life Healthcare employee share trust Long-term incentive scheme – CEO Long-term incentive scheme – CFO Long-term incentive scheme – southern Africa CEO and international CEO  
Type   An equity-settled scheme An equity-settled scheme An equity-settled scheme An equity-settled scheme  
Background   In terms of the scheme, the employer acquired Life Healthcare shares in the market at the ruling market price. The number of shares acquired for the scheme is limited to the value as approved by the Group's remuneration and human resources committee. The board wanted the CEO to own unencumbered shares in the Company. In terms of this arrangement the Company matched a maximum investment of R5 million by the CEO (previous CEO: R3 million) in Life Healthcare with a share purchase to a maximum value of R15 million (previous CEO: R9 million) in the market at the ruling market price. The Company matched shares are purchased upfront. The qualifying employee has six months to complete their purchase. The board wanted the CFO to own unencumbered shares in the Company. In terms of this arrangement the Company matched a maximum investment of R2 million by the CFO in Life Healthcare with a share purchase to a maximum value of R6 million in the market at the ruling market price. The Company matched shares are purchased upfront. The qualifying employee has six months to complete their purchase. The board wanted the SA and international CEOs to own unencumbered shares in the Company. In terms of this arrangement the Company bought shares to the value of R1.5 million for the SA CEO and shares to the value of GBP165 000 for the international CEO. The number of shares acquired for the scheme is limited to the value as approved by the Group's remuneration and human resources committee.  
Qualifying employees   All permanent employees employed by the employer in South Africa for a continuous period of at least one year as at the date of the allocation and who (i) is a member of an employer supported retirement scheme and who (ii) does not participate in the long-term incentive scheme are beneficiaries of the trust and participate in the scheme. Voting rights and dividends vest with the qualifying employees. Available to CEO Available to CFO Available to southern Africa and international CEOs  
Vesting requirements   Qualifying employees will need to be in service on the fifth (25%), sixth (25%) and seventh (50%) anniversaries when the shares are delivered. The shares will vest in equal tranches on 31 December 2023, 31 December 2024 and 31 December 2025 respectively and are subject to the following conditions:
  • Growth on total shareholder return (TSR) over predetermined thresholds relative to the TSR of listed comparator groups
    • In the case of unusual market conditions, the vesting will be subject to board discretion
  • The employee will be required to retain a level of investment in Company shares of at least the initial investment over the vesting period
Previous CEO
  • The vesting of the shares was subject to continued employment, vesting in equal tranches on 1 February 2019, 1 February 2020 and 1 February 2021 respectively.
 The shares will vest in equal tranches on 31 December 2023, 31 December 2024 and 31 December 2025 respectively and are subject to the following conditions:
  • Growth on TSR over predetermined thresholds relative to the TSR of listed comparator groups
    • In the case of unusual market conditions, the vesting will be subject to board discretion
  • The employee will be required to retain a level of investment in Company shares of at least the initial investment over the vesting period
 SA CEO
  • The vesting of these shares is subject to continued employment and will vest on 31 March 2021.
International CFO
  • These shares will vest on 30 September 2021 and are conditional on achievement of performance conditions; such as to achieve key strategic objectives in growing the international business.
  
Method of settlement   Shares Shares Shares Shares  
Leavers   Employees who leave, other than good leavers, forfeit their beneficial interest in the trust and their rights will be distributed equally among the remaining employees. If the employee leaves, other than as a good leaver, he will be entitled to all his co-investment shares but will forfeit the entire Company matched shares that have not vested. If the employee leaves, other than as a good leaver, he will be entitled to all his co-investment shares but will forfeit the entire Company matched shares that have not vested. If the employees leave, other than as a good leaver, the shares will be forfeited.  
2019 granted shares   3 000 462 shares at R21.55 – – –  
2020 granted shares   1 166 917 shares at R17.14 862 706 at R17.39 (existing CEO) 350 000 at R17.11 268 377 at R21.97  
Forfeited (number of shares)   n/a 112 365 (previous CEO) n/a n/a  
Exercised (number of shares)   n/a n/a n/a n/a  
Vested (number of shares)   1 666 859¹ 112 365 (previous CEO) n/a n/a  
Contribution   An annual contribution is made by each employer company in the Group for its qualifying employees. The charge and contribution reflected is for the Company's proportionate share only. An annual contribution is made by each employer company in the Group for its qualifying employees. The charge and contribution reflected is for the Company's proportionate share only.
  Long term incentive scheme effective from 2015 Long term incentive scheme effective from 2019  
Type   An equity-settled performance share scheme An equity-settled performance share scheme  
Background   The value of awards will be tier-based and linked to individual performance.
Each award will be converted into notional performance shares. In terms of the scheme the value of the awards and the performance conditions for vesting will be approved by the Group's remuneration and human resources committee.
The value of the notional performance shares will be determined by the price of the Life Healthcare shares on the JSE Limited using the 30-day volume weighted average traded price (VWAP).		 The value of awards will be tier-based and linked to individual performance. Each award will be converted into notional performance shares. In terms of the scheme the value of the awards and the performance conditions for vesting will be approved by the Group's remuneration and human resources committee. The value of the notional performance shares will be determined by the price of the Life Healthcare shares on the JSE Limited using the 30-day VWAP. Life Healthcare shares will be purchased on vesting date.

A modifier of between 1 and 2 can be applied to the allocation for key talent retention, this is applicable to all participants at the discretion of the CEO. The employees are not entitled to any dividends declared on the shares underlying the awards over the period from the grant date to the vesting date.		  
Qualifying employees   Available to all executives and senior managers in southern Africa. Available to all executives and senior managers in southern Africa.  
Vesting requirements   Vesting in terms of this scheme takes place in three years from allocation. The vesting of the awards is subject to the Group meeting two performance conditions:
  • 50% weighting:
    CEO and CFO: HEPS compared to CPI plus a percentage with a hurdle rate of minimum growth of CPI + 1% in HEPS for the award vested; Other executives and senior managers: Growth on earnings before interest and tax (EBIT) compared to CPI plus a percentage with a hurdle rate of minimum growth of CPI + 1% in EBIT for the award vested; and
  • 50% weighting:
    Growth on TSR over predetermined thresholds relative to the TSR of a comparator group of listed companies.
 Vesting in terms of this scheme takes place in three years from allocation. The vesting of the awards is subject to the following performance conditions:
Group executives:
  • Capital efficiency (40% weighting)
  • Normalised Group HEPS (40% weighting)
  • Life core purposes outcome (20% weighting)
Country executives and Group senior managers:
  • Capital efficiency (2020: 35% weighting, 2019: 30% weighting)
  • Normalised country EBIT (2020: 35% weighting, 2019: 30% weighting)
  • Life core purposes outcome (2020: 30% weighting, 2019: 40% weighting)
Other senior managers:
  • Capital efficiency (2020: 20% weighting, 2019: 15% weighting)
  • Normalised country EBIT (2020: 40% weighting, 2019: 35% weighting)
  • Life core purposes outcome (2020: 40% weighting, 2019: 50% weighting)
Capital efficiency is measured as return on capital employed compared to WACC.
Normalised Group HEPS is based on growth of HEPS in excess of CPI.
Normalised country EBIT is based on growth of EBIT in excess of CPI.
Life core purpose outcomes is based on country-specific non-financial measures that drive long-term sustainability of the Group.		  
Method of settlement   Shares Shares  

Leavers

  

If a participant ceases to be employed by the Group prior to the vesting of the grant date, the following will apply:

  • Good leavers with a date of termination of employment:
    • that is more than one year before the vesting date of the grant, will result in all notional performance shares held by the participant being forfeited and cancelled for no consideration; or
    • that is one year or less before the vesting date of the grant, will retain all notional performance shares and he/she shall continue to be treated as a participant as if his/her employment had not been terminated
  • Bad leavers with a date of termination of employment prior to vesting date, will result in all notional performance shares held by the participant being forfeited and cancelled for no consideration

If a participant ceases to be employed by the Group prior to the vesting of the grant, the following will apply:

  • Good leavers with a date of termination of employment:
    • that is more than one year before the vesting date of the grant:
      • 2019 scheme: will result in all notional performance shares held by the participant being forfeited and cancelled for no consideration;
      • 2020 scheme: the participant shall retain a pro rata number of notional performance shares based on number of months completed service relative to the vesting period of 36 months, the balance of notional performance shares shall be forfeited and cancelled for no consideration; or
    • that is one year or less before the vesting date of the grant, will retain all notional performance shares and he/she shall continue to be treated as a participant as if his/her employment had not been terminated (2019 and 2020 schemes).
  • Bad leavers with a date of termination of employment prior to vesting date, will result in all notional performance shares held by the participant being forfeited and cancelled for no consideration. (2019 and 2020 schemes)
  

2019 granted shares

  

n/a

Life Healthcare shares will be purchased on vesting date

  

2020 granted shares

  

n/a

Life Healthcare shares will be purchased on vesting date

  

Forfeited (number of shares)

  

n/a

n/a

  

Exercised (number of shares)

  

n/a

n/a

  
Vested (number of shares)  

Life Healthcare shares are purchased and distributed on vesting date

n/a

  
Contribution  

An annual contribution is made by each employer company in the Group for its qualifying employees. The charge and contribution reflected is for the Company's proportionate share only.

An annual contribution is made by each employer company in the Group for its qualifying employees. The charge and contribution reflected is for the Company's proportionate share only.