Northam Platinum : Remuneration report 2022

Part 1: Background statement

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Dear shareholder,

I am pleased to present the Northam remuneration report for the financial year ended 30 June 2022.

It is the responsibility of the remuneration committee to provide independent oversight of Northam's fixed and variable remuneration policies and practices. This includes ensuring that these policies and practices are appropriate to attract, motivate and retain the best talent at all levels of our organisation, and that they provide the right incentives to ensure delivery of Northam's strategic objectives over the short, medium and long-term.

Variable remuneration in particular, must be based on clear measures and stretched targets, which if met, will not only enhance shareholder value, but ultimately result in value creation for all stakeholders.

We are furthermore committed to ensure that executive remuneration is fair, responsible and appropriate in the context of general market conditions, company performance, industry pay levels, the economic outlook and overall employee remuneration.

We have also continued to actively seek feedback on our remuneration policy and the implementation thereof through various interactions with shareholders during the F2022 reporting period. Feedback from our shareholders have been noted and are detailed in this report.

Ongoing impact of COVID-19 - our response

Due to the significant financial uncertainty and disruption caused by the COVID-19 pandemic to our business and society at large, no changes were made with regards to the Key Performance Indicator (KPI) targets for variable remuneration.

Notwithstanding the ongoing impact of COVID-19 on our operations, especially at Zondereinde where the resurgence of new variants resulted in medical absenteeism and employee turnover being well above historical levels, and the fact that the pandemic has negatively impacted production and unit cash cost, original targets were maintained to ensure the continued execution of the group's strategy.

Annual General Meeting and shareholder engagement

We held our Annual General Meeting (AGM) on 29 October 2021. The F2021 remuneration policy and implementation report was tabled for separate non-binding advisory votes for approval by shareholders at the AGM.

Northam Holdings  Remuneration report 2022

Attracting and retaining talent, as well as succession planning

Income inequality in South Africa

Variable remuneration must be based on stretched targets

Gender pay gap

Attracting talent in the Platinum Group Metal (PGM) mining industry is a challenge. This is due to competition within the PGM sector, targeting the same talent from a small pool of experience in South Africa.

• Northam aims to attract, motivate and retain talent at all levels, particularly those employees with scarce or critical skills, through fixed and variable remuneration. This includes incentivising and rewarding employees for their performance
• We have clear talent retention and development strategies in place
• We invest in experienced talent and leverage their knowledge to upskill new talent, thereby facilitating the transfer of knowledge and succession planning
• We ensure that our lowest paid employees are remunerated well in excess of the minimum wage. On average, this amounts to a total guaranteed package for the lowest remunerated employee in excess of R23 000 per month
• We structure annual salary adjustments such that our lowest paid employees receive the highest percentage increases
• We benchmark group remuneration policies and practices against listed peers

Our Key Performance Indicators (KPI's) focus on basic mining principles:

• Enhanced safety
• Increasing production, and
• Cost control

These KPI's are largely under management's control and if met will lead to increased value for shareholders.

We are committed to gender equality and equal pay for equal work.

Voting outcomes for both the F2021 and F2020 periods

ForAgainst

Vote percentages based on a shareholder participation rate of:

1. 85.01% for F2021 and 86.14% for F2020
2. 85.38% for F2021 and 86.13% for F2020
3. 85.53% for F2021 and 86.14% for F2020

Critical skills and potential loss of key personnel is becoming an increased risk to the business

Mining employs specific and specialist skills. The availability and development of these skills are critical to operational sustainability. In addition, key personnel are a repository of corporate intelligence and have significant influence over the success or failure of the business.

The availability of critical skills, together with adequate succession planning within the organisation, are fundamental requirements and key to our success.

  Read about our risks in the managing risks and opportunities section in the Annual integrated report for the year ended 30 June 2022, available on our website

Part 1: Background statement