Integrated Annual Report
2025
This report outlines Italtile's remuneration philosophy and policy for non-executive directors, executive directors and prescribed officers. It also provides a description as to how the policy has been implemented and discloses payments made to non-executive and executive directors and prescribed officers during the year under review.
The report focuses on the fixed and variable elements of executive remuneration, as well as fees paid to non-executive directors and uses the single-figure disclosure format. Assessed against King IV and the amended JSE Listings Requirements, the Remuneration Committee is satisfied with the Company's compliance.
In line with leading practice as prescribed by King IV, this report is divided into three sections:
SECTION
It is a pleasure to present the Remuneration report of Italtile for the year ended 30 June 2025.
The mandate of the Committee is to exercise oversight of the remuneration practices and policies of the Group to ensure they promote achievement of strategic objectives and encourage individual performance. It focuses on responsible remuneration practices and structures across the Company and strives for fair, competitive and transparent remuneration.
The Committee is committed to:
At the AGMs held in 2023 and 2024, the Group's shareholders approved the Company's Remuneration policy and the Implementation report.
| 2023 in favour |
2024 in favour |
|
|---|---|---|
| Remuneration policy | 94,96% | 95,96% |
| Implementation report | 88,37% | 96,05% |
As delegated by the Board, the Committee assists in setting the Company's Remuneration policy and reviews, recommends and approves the remuneration of executive and non-executive directors, prescribed officers and senior management (collectively referred to as 'the executive team').
A core responsibility of the Remuneration Committee is to ensure that the remuneration philosophy and policy support Italtile as follows:
According to its terms of reference, the Committee's roles and responsibilities are to:
Key focus areas and decisions taken by the Remuneration Committee during the year under review include:
| Area of focus | Action | ||
| Fixed remuneration |
An annual review was undertaken of the guaranteed salaries of executives and the framework for increases for all other employees was also approved, ensuring fixed remuneration is fair and market related. |
||
| Key performance indicators |
The approach to KPI setting and review across the organisation was evaluated to ensure KPIs remain relevant and actionable to drive business performance and that they are integrated into periodic financial and performance reviews. KPIs for the executive team were approved. |
||
| Short-term incentives |
The structure of short-term incentives was analysed to strengthen the philosophy of empowerment and sharing which is premised on the principle of each individual employee making the fullest contribution towards the success of the business and sharing proportionally in the financial success. Feedback is provided below on the short-term incentives. The Short-Term Incentive structures and awards for the executive team, as well as the framework for all other employees were approved. |
||
| Long-term incentives |
Long-term incentives were reviewed to ensure the incentives motivate and reward employees while driving the desired performance and accountability. The long-term incentive structures and awards for the executive team, as well as the framework for all other employees were approved. |
||
| Responsible and fair pay |
Remuneration practices, structures and policy are monitored on an ongoing basis to promote fair, reasonable and equitable compensation for work of equal value considering the nature of work, skills and contributions of employees. Identified anomalies are addressed. The requirements of the Companies Amendment Act 16 of 2024 were considered. |
||
| Talent management and succession planning |
The effectiveness of the talent management framework was reviewed and succession plans analysed. |
||
| Non-executive director fees |
Recommendation was made for approval of non-executive director fees by the Board. |
As required by the Companies Act and King IV, the following resolutions will be tabled for shareholder voting at the AGM, details of which can be found in the Notice:
The approach of the Committee is to communicate and engage extensively with a range of shareholders regarding matters raised around the Remuneration policy and Implementation report. In the event that the Remuneration policy or Implementation report is voted against by shareholders representing 25% or more of the voting rights, dissenting shareholders will be invited to engage with the Company. The manner and timing of such engagement will be communicated to these shareholders, if necessary.
The Committee Chairperson reports to the Board after each Committee meeting and attends the AGM to answer questions from shareholders on the Committee's area of responsibility.
The Committee is focused on maintaining competitive remuneration practices across the Company while balancing the reward and motivation of key personnel with the need to drive accountability for performance. We recognise the need to retain top talent as it is a prerequisite to meet growth targets and shareholder expectations.
The Remuneration Committee is a sub-committee of the Board and meets at least three times per annum. The Committee is chaired by an independent non-executive director and comprises five directors. The majority of directors on the Committee are independent.
The assessment of the independence of any director who has been on the Board for longer than nine years is done annually by the Nominations Committee, to ensure the directors exercise objective, unfettered judgement and meet the required standards for independence.
The current members of the Committee are: Mrs A M Mathole (Chairperson), Mrs L Ravazzotti Langenhoven, Mr G A M Ravazzotti, Mrs S M du Toit and Mr S G Pretorius.
The Board considers the Committee's composition to be appropriate in terms of the necessary knowledge, skills and experience of its members. The Committee obtains expert advice to ensure it is kept up to date on remuneration practices.
The Italtile Group Company Secretary, Acorim Proprietary Limited, attends all meetings of the Committee as secretary. The Chairperson of the Board attends meetings by invitation. The CEO, COO and CFO attend all meetings by invitation to provide input and guidance regarding executive team remuneration.
No attendee may participate in any discussion or decision regarding his or her own remuneration.
The Committee met three times during the year. Attendance at the meetings was as follows:
| Members | Attendance at meetings |
| A M Mathole* | 3/3 |
| L Ravazzotti Langenhoven | 3/3 |
| G A M Ravazzotti | 3/3 |
| S G Pretorius | 3/3 |
| S M du Toit | 3/3 |
| L A Foxcroft** | 3/3 |
| B G Wood** | 3/3 |
| L Booysen** | 3/3 |
| * | Appointed Committee Chairperson on 1 December 2023. |
| ** | By invitation. |
We trust that this Remuneration report provides an accurate overview of the Remuneration policy of the Company, its implementation and specifically an in-depth view on executive management remuneration in the past year.
As the applicable framework and environment change in the year ahead, we will adapt accordingly to ensure that our remuneration practices and disclosures are compliant and appropriate.
A M Mathole
Remuneration Committee Chairperson
22 September 2025
SECTION
Italtile is committed to maintaining pay levels that reflect an individual's worth to the Group. The Group's philosophy is to treat employees as business partners, developing their sense of ownership, and to pay for performance.
Our remuneration philosophy is governed by the principles of equity, fairness, pay for performance and affordability, ensuring alignment between management and shareholder requirements.
Remuneration policies are designed to attract, reward and retain the executive team and employees needed to deliver on the business strategy, as well as the key corporate objectives.
The Remuneration policy subscribes to King IV recommendations and principles on which it is based including the following principles:
Italtile has an integrated remuneration and reward model, which includes guaranteed remuneration, short-term incentives ("STIs") and long-term incentives ("LTIs"). The components of total remuneration for permanent employees, prescribed officers and executives are fixed and variable remuneration.
Fixed remuneration comprises a basic salary and benefits, aligned to roles and performance. Variable remuneration comprises STIs and LTIs, aimed at retention of critical employees. Performance is measured against set performance indicators.
All employees share in Group profits, based on an individual's contribution to the Group. The Group has a minimum annual cost-to-company target of R141 990 per employee (2024: R134 600).
A Staff Share Scheme for all employees of the Group and its franchisees was approved by shareholders in November 2022. The first awards under this new scheme were made to qualifying employees in March 2023, with subsequent awards in March 2024 and March 2025. Awards to participants are in the form of units linked to shares held by a trust, and dividends accruing to participants from the date of issue of awards are retained by the trust to offset the future income tax liability of participants on vesting of the awards. Awards vest after three years if the participant remains in the employ of the Group or its franchisees.
The various elements of remuneration are outlined below.
Guaranteed salary is reviewed annually and positioned competitively against peers that are comparable in size, sector and business. Company performance, affordability, individual performance and average industry and sector increases are considered in determining any annual adjustment. Increases are generally inflation-linked and, where affordable, additional budget is allocated for adjusting remuneration levels that are not appropriately aligned to internal pay ranges and/or market rates for a specific job.
Benefits offered to employees include medical aid, provident fund and other benefits relevant to Italtile.
Steps that have been taken to improve the lives of the most junior employees are as follows:
The Italtile Group administers incentive schemes to encourage and reward delivery of its strategic priorities over the short, medium and long term. The STI focuses on achieving business targets in that financial year, while the long-term incentive closely aligns the interests of executives with shareholders over the longer term. It is also a retention mechanism.
All employees in the Group share in profit. There is a direct correlation between profit share and the profitability of the business. Therefore, no additional performance targets are set for profit share, as the profit share allocation is directly impacted by the level of the business's profitability, thereby ensuring a clear alignment between performance and pay. This is consistent for all employees across the business and demonstrates the core principle of partnership.
The profit pool range is determined as a percentage of profits per business unit.
Executives take part in the Executive Profit Share Scheme. The Executive Profit Pool is 0,33% of Group profit before tax, shared between the CEO, COO and CFO on a shared unit basis:
The prescribed officer (the CEO of Ceramics) shares in a percentage of Ceramic's profit. The profit pool at Ceramics for senior management is calculated as 0,89% of profit before tax, shared by five individuals. The CEO of Ceramic is a prescribed officer because he exercises general executive control and management over a significant portion of the business and he is allocated 43,5% (100/230 units) of the pool.
In terms of the policy on LTIs, there are three LTI schemes within the Italtile Group, each rewarding performance in an appropriate manner, designed to reward and retain key personnel. The LTIs include:
Qualifying criteria for the LTIs are as per the executive scorecards.
Executives and prescribed officers are encouraged to build a meaningful shareholding in the Company over time. The guideline from the Remuneration Committee is for executives to hold between 0,5% and 1,5% of issued shares.
The Remuneration Committee has the discretion to implement a Malus and Clawback policy, pursuant to which, on the occurrence of a trigger event, and at the instance and direction of the Remuneration Committee, the relevant employer in the Group will be entitled to clawback, a cash amount equal to the whole or any portion of the pre-tax cash proceeds of any cash incentive payment, including any short-term incentives and discretionary payments and 30% of the market value in the case where the incentive payment comprises Italtile shares received by the executive director or prescribed officer. The Remuneration Committee also has the discretion to require all incentive payments and awards that have not yet vested or settled, to be adjusted, forfeited or cancelled on the occurrence of a trigger event.
A trigger event would include, inter alia, the occurrence of any of the following events or circumstances:
The clawback applies for a period of three years after the cash payment of any short-term incentive and/or discretionary payment has been made to the executive director or prescribed officer in question or, in the case where payment has been made in the form of Italtile shares, three years after the Italtile shares have been transferred to the executive director or prescribed officer in question in terms of the Italtile Retention Scheme.
Executive and key management's performance is measured in the following categories, with specific performance targets/indicators per category, namely:
For the 2025 financial year, approved financial targets carried a weighting of 50% (HEPS, operating profit and ROSI). The other non-financial KPIs focused on productivity, transformation, customer service and ESG and carried a weighting of 50%. This is informed by the need to enhance focus on operational and strategic goals that are crucial to drive financial performance.
ESG matters have become more prominent globally. Given the appreciation of material sustainability issues facing our business and the strategic importance of building a sustainable business, additional tangible KPIs related to ESG matters were included in the year-end scorecards from 2021, in order to improve the link between ESG and remuneration.
The Remuneration Committee believes that the set of KPIs as per the executive scorecard agreed with the CEO is suitably challenging.
The outcome of the performance evaluation of the CEO is disclosed in the Implementation report to follow.
Executive directors and prescribed officers have permanent contracts, and the notice period prescribed by the contracts is three calendar months. Contracts are periodically reviewed to ensure they remain aligned with governance and legislative requirements.
Non-executive director fees for 2025 are tabulated in the Implementation report.
The Remuneration Committee reviews remuneration and Board-leading practice and remuneration trends to assess competitiveness in the market. External remuneration benchmark reviews published by PwC, EY and the Institute of Directors in South Africa are reviewed and taken into account when determining pay levels and structures.
Shareholders are requested to cast a non-binding advisory vote on section 2 of this Remuneration report (Remuneration policy).
SECTION
The Implementation report details the outcomes of implementing the approved policy in section 2 of this report.
The financial performance in the last year has been disappointing as sales volumes declined and profits did not grow at anticipated levels. Total system-wide turnover was down 2% at R11,3 billion (2024: R11,5 billion). The Group's trading profit was flat at R2,1 billion (2024: R2,1 billion).
While the results failed to meet expectations, the commendable performance was achieved under very difficult trading conditions.
Despite the performance, the Group considered the current economic conditions and the need for remuneration to remain competitive and the following salary increases were approved effective 1 July 2025:
| Under-achievers 0 – 2%; |  |
Achievers 3 – 4%; and | |
Superior achievers 5 – 6% |
In accordance with the Group's commitment to fair pay and being cognisant not to increase the wage gap, the following minimum basic adjustments will be implemented as from 1 July 2025:
| Minimum basic salary | 1/7/2025 – 30/6/2026 | 1/7/2024 – 30/6/2025 | % increase | ||
|---|---|---|---|---|---|
| CTM | R8 450 | R8 050 | 5,0% | ||
| TopT | R7 650 | R7 250 | 5,5% | ||
| Ceramic Industries | R8 715 | R8 300 | 5,0% |
As part of the focus to promote fair and responsible remuneration, the Committee is committed to identifying and addressing pay gaps.
The key performance areas for the CEO for the year under review were as per KPIs set for each category of the scorecard, as in prior years. Below is an extract of key KPIs and an assessment of performance against targets set.
| Notes and targets | Assessment | |
| Financial (50%) |
|
UNDER ACHIEVED |
| Strategic (15%) |
|
PARTIALLY ACHIEVED |
| Operations (10%) |
|
PARTIALLY ACHIEVED |
| Human capital (5%) |
|
PARTIALLY ACHIEVED |
| B-BBEE (5%) |
|
ACHIEVED |
| Customer experience (5%) |
|
PARTIALLY ACHIEVED |
| Cultural and values (5%) |
|
ACHIEVED |
| ESG (5%) |
|
ACHIEVED |
Considering the financial performance relative to targets set for the year, the overall performance of executives and the prescribed officer is regarded as 'partially achieved'. Financial targets weigh 50% of the overall scorecard, and the balance of the KPIs is 50%. It should be noted that management has placed enormous focus on strengthening people, processes, products and service, and improvements have been made towards achieving other targets related to human capital, ESG and B-BBEE. The management team continues to display energy, determination and focus in tough trading conditions, and the team effort is noteworthy.
Although key performance indicators can be further improved, the following successes are worth highlighting:
Continued areas of focus for improvement include increasing tile sales volumes, improving manufacturing productivity measures and improving customer experience.
The outcome of the performance assessment directly impacts decisions on guaranteed pay, STIs and LTIs, as illustrated in the table below.
| Description | Assessment of performance | Impact on executive remuneration |
| Guaranteed basic salary |
The rating for the CEO, COO and CFO was 'under-achieved' due to the non-achievement of the financial targets. Good progress was made in other areas as noted above. |
Performance-based increases approved:
Upon reflection, and given executive management's disappointment in the financial results for the year, the COO and CFO both waived the proposed increases. |
| Short-term incentives ("STIs") |
0,33% of Group profit before tax is shared between the CEO, COO and CFO on a shared unit basis:
The prescribed officer shares in a percentage of Ceramics' profit. Ceramics' profit share pool for senior management is 0,89% of profit before tax and the CEO is allocated 43,5% of the pool. |
Executives and the prescribed officer shared in profit as disclosed in the table below. Profit share across the Group is a core remuneration principle. As profits decrease, so does profit share, linking pay to performance. The pool remains constant unless the number of participants changes. |
| Long-term incentives ("LTIs") |
Awarded to high-performing, high-potential employees and executives in line with the Group's philosophy of partnership. LTIs are subject to performance conditions. Performance targets for each award are set by the Remuneration Committee. The targets include HEPS, ROIC and individual performance targets as appropriate, considering the role of the employee, and are weighted at the time of the award. |
All executives and the prescribed officer share in LTIs as disclosed in this section of the report. |
A review of the industry and JSE benchmarks of executive remuneration was conducted during the year, looking at best practice and comparable companies in terms of market capitalisation ("cap") to ensure competitiveness while considering fairness and stakeholder expectations around executive pay.
The September 2024 executive directors' practices and remuneration trends report, published by PwC, shows the following total guaranteed package ("TGP") for medium-cap companies:
Further internal sector benchmark reviews confirmed that Italtile provides more moderate executive base salaries relative to peers with similar market caps.
Executive directors' holdings under the SARS are set out in the table below.
Directors' holdings under the SARS are set out in the table below:
| Executive director | Awards held at 1 July 2024 |
Awarded during the year |
Vested and exercised during the year |
Forfeited during the year |
Awards held at 30 June 2025 |
|---|---|---|---|---|---|
| B G Wood | 1 012 500 | – | – | – | 1 012 500 |
Note: Directors no longer participate in new awards under the SARS but rather only in the Italtile Retention Scheme.
Directors' and prescribed officers' holdings under the Italtile Retention Scheme are set out in the table below:
| Executive director/prescribed officer | Awards held at 1 July 2024 |
Awarded during the year |
Vested and exercised during the year |
Forfeited during the year |
Awards held at 30 June 2025 |
|---|---|---|---|---|---|
| B G Wood | 1 500 000 | 1 000 000 | – | – | 2 500 000 |
| L A Foxcroft | 4 500 000 | 1 500 000 | – | – | 6 000 000 |
| L Booysen | 650 000 | 1 000 000 | – | – | 1 650 000 |
| G Maartens | 200 000 | 1 500 000 | – | – | 1 700 000 |
Prescribed officers' holdings under the Ceramic Industries Retention Scheme are set out in the table below:
| Prescribed officer | Awards held at 1 July 2024 |
Awarded during the year |
Vested and exercised during the year |
Forfeited during the year |
Awards held at 30 June 2025 |
|---|---|---|---|---|---|
| G Maartens | 32 500 | – | – | – | 32 500 |
Refer to note 6 for further details pertaining to these schemes.
| All figures in R'000 | Salary | Short-term incentives |
Provident fund and medical aid contributions |
Gain on share scheme awards |
Other | Total 2025 |
Total 2024 |
|
|---|---|---|---|---|---|---|---|---|
| Executive directors | ||||||||
| L A Foxcroft | 4 691 | 3 232 | 743 | 10 327 | 1 309 | 20 302 | 18 528 | |
| B G Wood | 3 181 | 2 155 | 525 | 3 739 | 528 | 10 128 | 9 329 | |
| L Booysen* | 2 907 | 1 796 | 501 | 913 | 289 | 6 405 | – | |
| 2025 | 10 779 | 7 183 | 1 769 | 14 979 | 2 126 | 36 835 | ||
| 2024 | 7 485 | 5 394 | 1 240 | 12 584 | 1 152 | 27 857 |
| * | Appointed on 1 July 2024 as CFO. |
| All figures in R'000 | Salary | Short-term incentives |
Provident fund and medical aid contri- butions |
Gain on share scheme awards |
Other | Total 2025 |
Total 2024 |
|
|---|---|---|---|---|---|---|---|---|
| Prescribed officers | ||||||||
| G Maartens | 3 000 | 1 421 | 851 | 987 | 435 | 6 694 | 6 076 | |
| 2025 | 3 000 | 1 421 | 851 | 987 | 435 | 6 694 | ||
| 2024 | 3 000 | 1 698 | 834 | 148 | 396 | 6 076 |
Payments to non-executive directors
| All figures in R'000 | Board fees | Other | Total 2025 |
Total 2024 |
|
|---|---|---|---|---|---|
| Non-executive directors | |||||
| L Ravazzotti Langenhoven | 2 075 | 7 | 2 082 | 3 131 | |
| G A M Ravazzotti | 514 | 514 | 468 | ||
| S M du Toit | 831 | 5 | 836 | 780 | |
| S G Pretorius | 895 | 895 | 745 | ||
| N P Khoza* | 577 | 5 | 582 | 528 | |
| L C Prezens | 533 | 4 | 537 | 640 | |
| J N Potgieter | 469 | 469 | 370 | ||
| A M Mathole | 735 | 735 | 483 | ||
| 2025 | 6 640 | 21 | 6 650 | ||
| 2024 | 7 131 | 14 | 7 145 |
| * | Resigned from the Board on 11 June 2025. |
The following fixed fees (excluding VAT) were in place for the year under review:
| Basic annual fee | R131 000 | |
|---|---|---|
| Board meeting fee | R31 500 | |
| Committee fee | R26 500 | |
| Chairperson of Committee | R32 750 | |
| Strategy session | R38 000 | |
| Chairperson of the Board | R1 575 000 |
Hourly rate for ad hoc work, not exceeding 144 hours a year: R4 500 per hour.
Executive directors and prescribed officers do not draw any additional remuneration for attending the main Board or Committee meetings.
Shareholders are requested to cast a non-binding advisory vote on section 3 of this Remuneration report.
We value our continued engagement with various stakeholders, and we endeavour to maintain our relationships with all in the hope that we will continue to receive their valued input.
This Remuneration report was approved by the Board of directors of the Company on 22 September 2025.
