UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON,
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_][ ]
Check the appropriate box:
[_] ]Preliminary Proxy Statement
[_] ]Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X]Definitive Proxy Statement
[_] ]Definitive Additional Materials
[_] ]Soliciting Material Pursuant to §240.14A -12§240.14A-12
NET 1 UEPSLESAKA TECHNOLOGIES, INC.
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required. | |
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NET 1 UEPS[ ]Fee paid previously with preliminary materials.
[ ]Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
LESAKA TECHNOLOGIES, INC.____________________
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on November 15, 2017
2023
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To the Shareholders of Net 1 UEPSLesaka Technologies, Inc.:
NOTICE IS HEREBY GIVEN that the 20172023 Annual Meeting of Shareholders of Net 1 UEPSLesaka Technologies, Inc. will be held at our principal executive offices located at President Place, 6th Floor, Cnr. Jan Smuts Avenue and Bolton Road, Rosebank, Johannesburg 2196, South Africa on November 15, 20172023 at 16:00 local time (9am(9:00 am Eastern Time), for the following purposes:
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1.To elect twelve directors to serve until the next Annual Meeting of Shareholders and until their successors are duly elected and qualified. 2.To ratify the selection of KPMG, Inc. as our independent registered public accounting firm for the fiscal year ending June 30, 2024. 3.To hold an advisory vote to approve executive compensation. 4.To hold an advisory vote regarding whether an advisory vote on executive compensation will occur every one, two or three years. 5.To transact such other business and act upon any such other matters which may properly come before the annual meeting or any adjournment or postponement of the meeting. |
Our Board of Directors has fixed the close of business on September 22, 2017,2023, as the record date for determining shareholders entitled to notice of and to vote at the meeting. A list of the shareholders as of the record date will be available for inspection by shareholders at our principal executive offices during business hours for a period of ten days prior to the meeting.
Your attention is directed to our annual report for the fiscal year ended June 30, 2017,2023, which is enclosed with this proxy statement.
Sincerely,
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| Kuben Pillay Chairman | Chris Meyer Group Chief Executive Officer | |
| Johannesburg, South Africa | ||
September 29, | 2023 |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 15, 2017.2023. A complete set of proxy materials relating to our annual meeting is available on the internet. These materials, consisting of the Notice of Annual Meeting of Shareholders and Proxy Statement, including proxy card, and annual report, may be viewed and downloaded at https://materials.proxyvote.com/64107N.
You are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please complete, date, sign and return the proxy accompanying this notice as promptly as possible in order to ensure your representation at the meeting. A return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Even if you have voted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other agent and you wish to vote at the meeting, you must request and obtain a proxy issued in your name from that record holder. You may also submit your proxy via the internet as specified in the accompanying internet voting instructions. Shareholders registered on our South African Branch Register (“("South African Shareholders”Shareholders") are referred to the special instructions contained on page 5 of this proxy statement.
TABLE OF CONTENTS
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NET 1 UEPSLESAKA TECHNOLOGIES, INC.
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PROXY STATEMENT EXECUTIVE SUMMARY
ANNUAL MEETING OF SHAREHOLDERS
| Time and Date | 16:00 local time |
| Place | President Place, 6th Floor, Cnr. Jan Smuts Avenue and Bolton Road, Rosebank, Johannesburg, 2196, South Africa |
| Record Date | September 22, |
PROPOSALS TO BE VOTED ON AND BOARD VOTING RECOMMENDATIONS
The following is a summary of proposals to be voted on at the annual meeting.meeting and the recommendation of our Board of Directors (our "Board") with respect to each such proposal. This is only a summary, and it may not contain all of the information that is important to you. For more complete information, please review the proxy statement as well as our annual report on Form 10-K.
Proposal 1 | ||
Election of Directors | ||
The Board has nominated twelve of our current Recommendation: Our Board recommends a vote FOR each of the director nominees. | Proposal 2 Ratification of Independent Registered Public Accounting Firm The Board is asking shareholders to ratify the selection of | |
Recommendation:Our Board recommends a voteFOR |
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Proposal 3 | ||
Advisory Vote to Approve Executive Compensation | ||
The Board is providing shareholders with the opportunity to vote to approve, on an advisory basis, the compensation of our executive officers named in the Summary Compensation Table under Recommendation: Our Board recommends a vote FOR the approval of executive compensation. | Proposal 4 Advisory Vote to Recommend How Often an Advisory Vote on Executive Compensation Should Occur The Board is providing shareholders with the opportunity to | |
Recommendation:Our Board recommends a |
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We are taking advantage of the Securities and Exchange Commission rules that allow companies to furnish proxy materials to their shareholders over the internet. On or about October 2, 2023, we mailed to shareholders of record on the record date a Notice of Internet Availability of Proxy Materials (the "Notice") containing instructions on how to access this proxy statement and our annual report for the fiscal year ended June 30, 2023 online. If you received a Notice by mail, you will not automatically receive a printed copy of our proxy materials in the mail. You may request a paper copy of our proxy materials by mail or an electronic copy by e-mail by following the instructions listed on the Notice.
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CORPORATE GOVERNANCE
Our Board is committed to excellence in corporate governance. We believe that principled and ethical governance benefits you, our shareholders, as well as our customers, employees and communities, and we maintain a governance profile that aligns with industry-leading standards. We believe that our governance structure will have a direct impact on the strength of our business. The following table presents a brief summary of highlights of our key governance profile.structures.
Board Conduct and Oversight | Independence and Participation | Shareholder Rights | |||
✓Regular risk assessment | |||||
✓Standards of ethics applied to all directors, executive officers and employees | |||||
✓Significant time devoted to succession planning and leadership development efforts ✓Evaluations of the Board and its committees | ✓Separate Chairman of the Board and Group Chief Executive Officer ✓Independent Chairman ✓Seven of twelve directors are Nasdaq-independent ✓Executive sessions of | ||||
✓Audit Committee, Remuneration Committee, and Nominating and Corporate Governance Committee are each made up entirely of independent directors | ✓Special meeting right for shareholders holding an aggregate of 10% of voting stock ✓All directors annually elected; no staggered Board ✓No "Poison Pill" ✓No supermajority voting requirements to change organizational documents | ||||
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VOTING RIGHTS AND PROCEDURES
Shareholders as of the close of business on September 22, 2017,2023, the record date, may attend and vote at the annual meeting. Each share is entitled to one vote. There were 56,927,69661,516,860 shares of common stock outstanding on the record date.
A majority of the total number of outstanding shares of common stock, present either in person or by proxy, will constitute a quorum for the transaction of business at the annual meeting. Shareholders who are present at the annual meeting in person or by proxy and who abstain, and proxies relating to shares held by a bank or broker on your behalf (that is, in “street name”"street name"), that are not voted (referred to as “broker non-votes”"broker non-votes") will be treated as present for purposes of determining whether a quorum is present. In the event that there are not sufficient votes to approve any proposal at the annual meeting, the annual meeting may be adjourned in order to permit the further solicitation of proxies. The inspector of election appointed for the annual meeting will tabulate all votes and will separately tabulate affirmative and negative votes, abstentions and broker non-votes.
The following describes how you may vote on each proposal and the votes required for approval of each proposal:
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Proposal No 1-Our twelve director nominees will be elected by a plurality of votes. You may vote for each director nominee or withhold your vote from one or more of the nominees. Withholding a vote as to any director nominee is the equivalent of abstaining. In an uncontested election such as this, abstentions and broker non-votes have no effect, since approval by a specific percentage of the shares present or outstanding is not required.
Proposal No. 2-The ratification of the selection of KPMG, Inc. ("KPMG") to act as our independent registered public accounting firm will be approved if the votes cast in favor of the proposal exceed the number of votes cast against the proposal. You may vote for or against the proposal or you may abstain from voting. Abstentions and broker non-votes will not affect the outcome of the vote.
Proposal No. 3-The advisory vote to approve executive compensation will be approved if the votes cast in favor of the proposal exceed the number of votes cast against the proposal. You may vote for or against the proposal or you may abstain from voting. Abstentions and broker non-votes will not affect the outcome of the vote.
Proposal No. 4-With respect to the advisory vote on the frequency of the advisory vote on executive compensation, you may vote for a frequency of every one year, two years or three years. Shareholders will be considered to have expressed a frequency preference for the alternative that receives the most votes. Abstentions and broker non-votes will not affect the outcome of the vote.
If you provide your voting instructions on your proxy, your shares will be voted as you instruct, and, according to the best judgment of the persons named in the proxy if a proposal comes up for a vote at the annual meeting that is not on the proxy, according to the best judgment of the persons named in the proxy.
If you do not indicate a specific choice on a proxy that you sign and submit, your shares will be voted:
FOR each of the director nominees;
FOR the ratification of the selection of KPMG as our independent registered public accounting firm;
FOR the approval of executive compensation; and
for ONE YEAR as the desired frequency of the advisory vote on executive compensation.
If your shares are held in “street"street name,”" and you do not instruct the bank or broker as to how to vote your shares on Proposals 1, 3 or 4, the bank or broker may not exercise discretion to vote for or against those proposals. This would be a “broker non-vote”"broker non-vote" and these shares will not be counted as having been voted on the applicable proposal. With respect to Proposal 2, the bank or broker may exercise its discretion to vote for or against that proposal in the absence of your instruction.Please instruct your bank or broker so your vote can be counted.
Revocability of Proxies
You may revoke your proxy at any time prior to exercise of the proxy by delivering a written notice of revocation or a duly executed proxy with a later date by mail to our corporate secretary at Net 1 UEPSLesaka Technologies, Inc., POP.O. Box 2424, Parklands 2121, South Africa, or by attending the meeting and voting in person. If you hold shares through a bank or brokerage firm,in "street name", you must contact that firm to revoke any prior voting instructions.
Internet Availability of Proxy Materials and Annual Report
A complete set of proxy materials relating to our annual meeting is available on the internet. These materials, consisting of the Notice of Annual Meeting of Shareholders and Proxy Statement, including proxy card, and annual report, may be viewed and downloaded at https://materials.proxyvote.com/64107N.
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Market Information
Our common stock is listed on The Nasdaq Global Select Market (“Nasdaq”("Nasdaq") in the United States under the symbol “UEPS”"LSAK" and, via a secondary listing, on the Johannesburg Stock Exchange (“JSE”("JSE"), in South Africa under the symbol “NT1.”"LSK". Nasdaq is our principal market for the trading of our common stock. Our transfer agent in the United States is Computershare Shareowner Services LLC, 480 Washington Blvd., Jersey City, New Jersey 07310. Our transfer agent in South Africa is Link MarketJSE Investor Services South Africa (Pty) Ltd (“Link Market”("JSE Investor Services"), 13th Floor, 19 Ameshoff Street, Braamfontein, 2001,One Exchange Square, 2 Gwen Lane, Sandown, Sandton, 2196, South Africa.
Special Instructions to South African Shareholders
We are required to comply with certain South African regulations related to the circulation and tabulation of proxies issued to our South African Shareholders. The proxy form marked “Net 1 UEPS"Lesaka Technologies, Inc. Proxy for Shareholders Registered on South African Branch Register”Register" must be used by South African Shareholders. The South African proxy must be lodged, posted or faxed to Link MarketJSE Investor Services so as to reach them by 16:00, local time, on November 10, 2017.2023. South African Shareholders that have already dematerialized their shares through a Central Securities Depository Participant (“CSDP”("CSDP") or broker, other than with own-name registration, should not complete the South African proxy. Instead, they should provide their CSDP or broker with their voting instructions or, alternatively, they should inform their CSDP or broker of their intention to attend the annual meeting in order for their CSDP or broker to be able to issue them with the necessary authorization to enable them to attend such meeting. South African Shareholders that hold their shares in certificated form or dematerialized own-name registration should complete the South African proxy and return it to Link Market.JSE Investor Services.
Solicitation
The Board is soliciting your proxy to vote your shares at the annual meeting. We will bear the entire cost of the solicitation, including the preparation, assembly, printing and mailing of this proxy statement, including the proxy card and any additional solicitation materials furnished to our shareholders. Copies of solicitation materials will be furnished to brokerage houses, fiduciaries and custodians holding shares in their names that are beneficially owned by others so that they may forward this solicitation material to such beneficial owners. We may reimburse these persons for their reasonable expenses in forwarding solicitation materials to beneficial owners. The original solicitation of proxies by mail may be supplemented by a solicitation by personal contacts, telephone, facsimile, electronic mail or any other means by our directors, officers or employees. No additional compensation will be paid to our directors, officers or employees for performing these services. Except as described above, we do not presently intend to solicit proxies other than by mail.
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PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL NO. 1: ELECTION OF DIRECTORS
The terms of office of each of our current directors will expire at the annual meeting. The Board has nominated for reelection eachre-election twelve of our current directors (see “Information"Information Regarding the Nominees”Nominees" for information on all directors), each for a one-year term.
The persons named in the enclosed proxy intend to vote properly executed and returned proxiesFOR the election of all nominees proposed by the Board unless authority to vote is withheld. In the event that any nominee is unable or unwilling to serve, the persons named in the proxy will vote for such substitute nominee or nominees as they, in their discretion, shall determine. The Board has no reason to believe that any nominee named herein will be unable or unwilling to serve.
The Board recommends that you vote FOR the election of each of the director nominees.
Information Regarding the Nominees
63 years old Director since | Mr. |
The Board believes that Mr. | |
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52 years old Director since | Mr. |
The Board believes that Mr. | |
50 years old Director since | Mr. |
The Board believes that Mr. |
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| Steven J. Heilbron 58 years old Director since 2022 | Mr. Heilbron has been the Chief Executive Officer of the |
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The Board believes that Mr. | |
| Lincoln C. Mali 55 years old Director since 2021 | Mr. Mali has been our Chief Executive Officer: Southern Africa since May 1, 2021. Mr. Mali is a financial services executive with over 25 years in the industry. Until April 2021, he was the Head of Group Card and Payments at Standard Bank Group, having served in many different roles within that organization since 2001. Mr. Mali chaired the board of directors of Diners Club South Africa until April 2021, and was a member of the Central and Eastern Europe, Middle East and Africa Business Council for Visa. Mr. Mali holds Bachelor of Arts (BA) and Bachelor of Laws (LLB) degrees from Rhodes University, an MBA from Henley Management College, various diplomas and attended an Advanced Management Program at Harvard Business School. |
| The Board believes that Mr. Mali's strong relationships and network with key industry players in South Africa and his motivational leadership style make him well-suited to serve as a director. | |
| Antony C. Ball 64 years old Director since 2020 | Mr. Ball is co-founder and chairman of Value Capital Partners (Pty) Ltd ("VCP"), a South Africa-based investment firm. Prior to VCP, Mr. Ball co-founded Brait in 1990, a leading South African private equity firm, regarded as a pioneer of private equity in the region, and held various leadership positions, including Deputy Chairman and CEO, between 1998 and 2011 when he left the company. Mr. Ball led Brait's investment in Lesaka in 2004, and served as a non-executive director of the company until 2012. Mr. Ball has a B Comm (Hons) from UCT, is a CA(SA), and completed an M Phil in Management Studies from Oxford University, where he studied as a Rhodes Scholar. |
| The Board believes that Mr. Ball's expertise in private equity, public markets, finance, accounting and corporate governance and broad experience as an officer and director of several publicly-traded companies covering a broad range of industries make him a valuable member of our Board. | |
| Nonkululeko N. Gobodo 62 years old Director since 2021 | Ms. Gobodo is the first black female-chartered accountant in South Africa and brings a wealth of accounting and auditing experience from over 35 years of executive experience. She also has extensive experience as a non-executive director, having served on many boards including JSE listed Clicks Group Limited, PPC Limited and Shoprite Holdings Limited, as well as, Mercedes Benz, Imperial, the SA Maritime Authority, and the South Africa Revenue Service audit committee. She is a pioneer in her field, having established her own successful accounting and audit firm during the apartheid era. The firm grew to become SizweNtsalubaGobodo ("SNG"), the largest black accounting firm in South Africa. In 2018, SNG acquired the Grant Thornton South Africa license. In 2016, Ms. Gobodo founded Nonkululeko Leadership Consulting, a boutique, black-owned and managed leadership consulting firm based in Sandton and served as its CEO for five years. In May 2021, she started Awakened Global, a movement that is contributing to end racial and gender inequality. She is a recipient of many business and professional awards. She was appointed as the Chancellor of the Walter Sisulu University in April 2023. |
| The Board believes that Ms. Gobodo's experience in finance and audit and knowledge of the South African marketplace provides necessary and desired skills, experience and South African-centric perspective to our Board. |
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| Javed Hamid 79 years old Director since 2020 | Mr. Hamid is currently a senior advisor to the International Executive Service Corps and held various positions with the International Finance Corporation ("IFC"), a member of the World Bank Group, and a major shareholder in Lesaka, from 1979 to 2006. He was on the Management Committee of IFC and served as the Regional Director for East Asia and Pacific Region. He was on the board of listed banks in Pakistan and Serbia, on the Pension Finance Committee of the World Bank Pension Fund and the Investment Committee of Lombard Thailand Private Equity Fund. He currently chairs the board of Small Enterprise Assistance Funds (USA) and is on the board of Salem University (USA) and Asia Research Capital Management Hedge Fund (Hong Kong). He has extensive international banking, investment and project finance experience and a strong background in investing in emerging markets, structuring investments, managing international investment portfolios, and providing technical assistance to companies in developing countries. He has a keen interest in sustainable development and corporate governance issues. Mr. Hamid holds a Master of Business Administration, from Harvard Business School, a Master of Arts from the University of Cambridge, a Bachelor of Arts in Economics, from the University of Cambridge and a Bachelor of Arts in Economics, Mathematics and Statistics, from the University of Punjab. |
| The Board believes that Mr. Hamid's substantial international experience; risk and financial expertise; his experience managing international investments, and his skills in dealing with corporate governance issues makes him a valuable member of our Board | |
| Ali Mazanderani 41 years old Director since 2020 | Mr. Mazanderani is a fintech investor and entrepreneur. He is the co-founder and chairman of SaltPay. He is also a non-executive director on the board of several companies including StoneCo (Nasdaq: STNE) in Brazil. He was formerly a Partner at Actis, an emerging market private equity firm, where he led multiple landmark fintech investments globally. Prior to his career at Actis, Mr. Mazanderani was the lead strategy consultant for First National Bank based in Johannesburg and prior to that, he advised private equity and corporate clients for OC&C Strategy Consultants in London. |
| He holds a Bachelors degree in Economics from the University of Pretoria, a Masters in Economics from Oxford University, a Masters in Economic History from the London School of Economics, a Masters in Business Law from the University of St. Gallen and an MBA from INSEAD. | |
| The Board believes that Mr. Mazanderani's international experience in strategy, payments, technology, and private equity provide necessary and desired skills, experience and perspective to our Board. | |
| Venessa Naidoo 59 years old Director since 2023 | Ms. Naidoo brings a wealth of experience in finance, launching new technologies, managing rapid international growth, restructures, operating in emerging market economies and currencies, and delivering success in highly competitive environments. She is an experienced non-executive director and currently serves on the boards of both OUTsurance (JSE: OUT), a leading South African insurance company, and RFG Holdings Limited (JSE: RFG) in South Africa. |
| She holds a Bachelor of Accounting and Postgraduate Diploma in Accountancy from the University of Durban-Westville and is a Chartered Accountant (SA). She also completed the Harvard Business School and University of the Witwatersrand Senior Executive Programme. | |
| The Board believes that Ms. Naidoo's international experience in finance and audit, her entrepreneurial track record are essential qualities required by our Board. | |
| Monde Nkosi 33 years old Director since 2020 | Mr. Nkosi is an investor with experience in private and public equities in South Africa and the U.S. He is an executive director of VCP and a non-executive director of several public and private businesses, including ADvTECH Limited. He was previously on the investment team of FFL Partners, a San Francisco-based private equity firm managing more than $2 billion. Prior to that, Mr. Nkosi was a management consultant at Bain & Company, focused on financial services and telecommunications clients across Sub-Saharan Africa. Mr. Nkosi holds a Bachelor of Business Science from the University of Cape Town, a Master of Arts in Education from the Stanford Graduate School of Education, and an MBA from the Stanford Graduate School of Business. |
| The Board believes that Mr. Nkosi's expertise in corporate strategy, corporate finance and capital allocation make him a valuable member of our Board. |
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| Ekta Singh-Bushell 51 years old Director since 2018 | Ms. Singh-Bushell serves on global technology public and private corporate boards. She is a member of the board and chair of the nominating and governance committee, and technology committee for Huron Consulting Group (NASDAQ: HURN), a global consulting company offering services to healthcare, higher education, and life sciences and commercial industries; ChargePoint, Inc. (NYSE: CHPT), a leading EV charging as a service company, where she is a member of the audit committee; TTEC, Inc. (NASDAQ: TTEC), a leading global customer experience technology and services company, focusing on the design, implementation, and delivery of transformative customer experience for various brands, where she is a member of the audit, and chair of the technology and security committee; She formerly served on the boards of Datatec Limited (JSE: DTC), an international ICT solutions and services group, as Lead Independent Director and Designer Brands Inc. (NYSE: DBI) as a member of the audit, remuneration and nomination committees. From 2016 to 2017, Ms. Singh-Bushell served as deputy to the first vice president, chief operating officer executive office, at the Federal Reserve Bank of New York. Prior to 2016, Ms. Singh-Bushell worked at Ernst & Young, serving in various leadership roles including global IT Effectiveness leader, US innovation & digital strategy leader; and chief Information security officer. Ms. Singh-Bushell is a member of the board of Women's Health Access Matters, a non-profit that supports increased awareness in women's health research, and between 2004 and 2014 she served in various leadership roles for the Asian American Federation. Ms. Singh-Bushell is a Certified Public Accountant and holds advanced international certifications in governance, sustainability, information systems security, audit, and control. |
| Ms. Singh-Bushell's experience in finance, audit, technology, and cybersecurity, as well as her international experience bring relevant and necessary skills, experience, and perspective to our Board. | |
| In considering Ms. Singh-Bushell's nomination to the Board, the Nominating & Governance Committee of the Board considered all of Ms. Singh-Bushell's Board commitments and determined that they, in the aggregate, do not interfere with her commitments to Lesaka. Moreover, the Committee determined that the knowledge and experience that Ms. Singh-Bushell attains from these additional commitments provide an important dimension to the Lesaka Board, especially in the financial services and technology areas which are all directly relevant to our business. |
PROPOSAL NO. 2: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Audit Committee of our Board has selected DeloitteKPMG to serve as our independent registered public accounting firm for the fiscal year ending June 30, 2018.2024. A representative of DeloitteKPMG is expected to be present at the annual meeting. Such representative will have an opportunity to make a statement if he or she desires to do so and is expected to be available to respond to appropriate questions from shareholders. KPMG replaced Deloitte currently serves asand Touche (South Africa) ("Deloitte"), our previous independent registered public accounting firm.firm, from the conclusion of Deloitte's audit of our fiscal year ending June 30, 2023, consolidated financial statements.
We are asking our shareholders to ratify the selection of DeloitteKPMG as our independent registered public accounting firm for the fiscal year ending June 30, 2018.2024. Although ratification is not required by our Amended and Restated By-Laws or otherwise, the Board is submitting the selection of DeloitteKPMG to our shareholders for ratification as a matter of good corporate practice. In the event our shareholders fail to ratify the appointment, the Audit Committee may reconsider this selection. Even if the selection is ratified, the Audit Committee in its discretion may select a different registered public accounting firm at any time during the year if it determines that such a change would be in our best interests and the best interests of our shareholders.
The Board recommends a vote FOR the ratification of the selection of Deloitte.KPMG.
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PROPOSAL NO. 3: AN ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
We are providing you with the opportunity to vote to approve, on an advisory basis, the compensation of our executive officers named in the Summary Compensation Table under “Executive"Executive Compensation,”" to whom we refer to as our “named"named executive officers”officers" or NEOs."NEOs". This proposal, which is commonly referred to as “say"say on pay,”" is required by Section 14A of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”"Exchange Act").
The philosophy of our executive compensation program is to link compensation to the achievement of our key strategic and financial goals. Therefore, we reward our executives for their contributions to our annual and long-term performance by tying a significant portion of their total compensation to key drivers of increased shareholder value. At the same time, we believe our program does not encourage excessive risk-taking by management. The “Executive Compensation”"Executive Compensation" section of this proxy statement beginning on page 13,20, including the “Compensation"Compensation Discussion and Analysis,”" describes in detail our executive compensation program and the decisions made by the Remuneration Committee with respect to our fiscal year ended June 30, 2017.2023.
The Board is asking shareholders to cast a non-binding advisory vote on the following resolution:
“"Resolved, that the compensation paid to the Company’sCompany's named executive officers, as disclosed pursuant to the disclosure rules of the U.S. Securities and Exchange Commission (the "SEC"), including the Compensation Discussion and Analysis, compensation tables and narrative discussions, is approved on an advisory basis.”basis".
Because your vote is advisory, it will not be binding upon the Board or the Remuneration Committee. However, the Board and the Remuneration Committee value the opinions expressed by our shareholders and will consider the outcome of the vote when considering future executive compensation decisions.
The Board recommends a vote FOR the approval of the compensation of our named executive officers.
PROPOSAL NO. 4: AN ADVISORY VOTE REGARDING WHETHER AN ADVISORY VOTE ON EXECUTIVE COMPENSATION WILL OCCUR EVERY ONE, TWO OR THREE YEARS
In Proposal No. 3, we are providing you with the opportunity to vote to approve, on an advisory basis, the compensation of our NEOs. In this Proposal No. 4, we are asking you to cast an advisory vote regarding the frequency of future executive compensation advisory votes. You may vote for a frequency of every one, two or three years, or you may abstain on the proposal.
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After careful consideration, our Board currently believes that an executive compensation advisory vote should be held every year, and therefore, our Board recommends that you vote for a frequency of every ONE YEAR for future executive compensation advisory votes. The Board believes that an annual executive compensation advisory vote will allow our shareholders to provide us with their direct input on our compensation philosophy, policies and practices as disclosed in the proxy statement on a regular and frequent basis. It is also consistent with our policy of reviewing our executive compensation program annually.
Because this vote is advisory, it will not be binding upon the Board or Remuneration Committee. However, the Board will take into account the outcome of the vote when considering when to hold the next shareholder advisory vote on executive compensation.
The Board recommends a frequency vote of every “ONE YEAR”"ONE YEAR" for future executive compensation advisory votes.
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
MEETINGS OF THE BOARD AND DIRECTOR INDEPENDENCE
Our Board typically holds a regular meeting once every quarter and holds special meetings when necessary. During the fiscal year ended June 30, 2017,2023, our Board held a total of ninefive meetings. Each of our incumbent directors attended 100% of the total number of such meetings of the Board and the total number of meetings held by all committees of the Board on which each such director served, during the period for which each such director served. We encourage each member of the Board to attend the annual meeting of shareholders, but have not adopted a formal policy with respect to such attendance.
All of our directors who served during fiscal 2017Messrs. Pillay, Meyer, Ball, Kola, Mali, and Nkosi and Ms. Gobodo attended last year’syear's annual meeting, except Messrs. S.C.P. Belamant, Edwards and Pein (and Mr. Mockett, who joined the Board after our annual meeting).meeting. The non-employee directors meet regularly without any management directors or employees present. These meetings are held on the day of or the day preceding other Board or committee meetings.
The Board annually examines the relationships between us and each of our directors. After this examination, the Board has concluded that Messrs. Seabrooke, Pein, EdwardsHamid and MockettPillay, and Mses. Gobodo, Naidoo and Singh-Bushell are “independent”"independent" as defined under Nasdaq Rule 5605(a)(2) and under Rule 10A-3(b)(1) under the Exchange Act, as that term relates to membership on the Board and the various Board committees. Messrs. Ball and Nkosi are "independent" as defined under Nasdaq Rule 5605(a)(2), as that term relates to membership on the Board and the various Board committees other than the Audit Committee.
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COMMITTEES OF THE BOARD
The Board has established an Audit Committee, a Remuneration Committee, and a Nominating and Corporate Governance Committee.Committee, a Social and Ethics Committee and a Capital Allocation Committee (collectively, the "Board Committees"). The current members of our Board Committees are presented in the table below:
| Director | AuditCommittee | Remuneration Committee | Nominating and Corporate Governance Committee | Social and Ethics Committee | Capital Allocation Committee | ||||||||||
| Antony C. Ball | X* | X | X* | ||||||||||||
| Nonkululeko N. Gobodo | X | X* | |||||||||||||
| Javed Hamid | X | X | |||||||||||||
| Steven J. Heilbron (#) | |||||||||||||||
| Naeem E. Kola (#) | |||||||||||||||
| Lincoln C. Mali (#) | |||||||||||||||
| Ali Mazanderani | X | ||||||||||||||
| Chris Meyer (#) | |||||||||||||||
| S. Venessa Naidoo | X | ||||||||||||||
| Monde Nkosi | X | X | |||||||||||||
| Kuben Pillay (*) | X | X* | X | ||||||||||||
| Ekta Singh-Bushell | X* | X | X | ||||||||||||
| # Executive | |||||||||||||||
| * Chairperson | |||||||||||||||
# Executive* Chairperson
Audit Committee
The Audit Committee consists of Messrs. Seabrooke, Pein, EdwardsMses. Singh-Bushell, Gobodo, Naidoo and Mockett,Mr. Hamid, with Mr. SeabrookeMs. Singh-Bushell acting as the Chairperson. The Board has determined that Mr. Seabrooke isMses. Singh-Bushell and Gobodo are each an “audit"audit committee financial expert”expert" as that term is defined in applicable SEC rules, and that all members meet Nasdaq’sNasdaq's financial literacy criteria. The Audit Committee held nineeight meetings during the 20172023 fiscal year. See “Audit"Audit Committee Report”Report" on page 32.41.
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The Audit Committee was established by the Board for the primary purpose of overseeing or assisting the Board in overseeing the following:
Audit | ||
| Compliance Processes
| |
Financial Reporting | ||
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the accounting and financial reporting processes and the audits of our financial statements | ||
our systems of disclosure controls and procedures and internal control over financial reporting | Risk Management
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A copy of our Audit Committee charter is available withoutfree of charge on our website, www.net1.com.www.lesakatech.com.
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Remuneration Committee
The Remuneration Committee consists of Messrs. Pein, Seabrooke, EdwardsBall, Nkosi, and Mockett,Pillay, with Mr. PeinBall acting as the Chairperson. The Remuneration Committee held fourfive meetings during the 20172023 fiscal year.
The Remuneration Committee has the following principal responsibilities, authority and duties:
Compensation Structure & Strategy | ||
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make recommendations to the Board with respect to | ||
review and make recommendations to the Board regarding compensation-related matters outside the ordinary course, including, but not limited to, employment contracts, | ||
administer our stock option, stock incentive, and other stock compensation plans, including the function of making and approving all grants of options and other awards to all executive officers and directors, and all other eligible individuals, under such plans | ||
review annually and make recommendations to the Board regarding director compensation | ||
assist management in developing and, when appropriate, | ||
review and discuss with management the disclosures in our "Compensation Discussion and Analysis" and any other disclosures regarding executive compensation to be included in our public filings or shareholder reports | ||
recommend to the Board whether the Compensation Discussion and Analysis should be included in our proxy statement, Form 10-K, or information statement, as applicable, and prepare the related report required by the rules of the SEC | Human Resources & Workforce Management
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A copy of our Remuneration Committee charter is available withoutfree of charge on our website, www.net1.com.www.lesakatech.com.
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Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee comprisesconsists of Messrs. Seabrooke, Pein, EdwardsPillay, Ball and Mockett,Hamid and Ms. Singh-Bushell, with Mr. SeabrookePillay acting as the Chairperson. The Nominating and Corporate Governance Committee held four meetings during the 20172023 fiscal year.
The principal duties and responsibilities of the Nominating and Corporate Governance Committee are as follows:
Corporate Governance | ||
| Board Composition
| |
establish criteria for Board and committee membership and recommend to our Board proposed nominees for election to the Board and for membership on each committee of the Board | ||
monitor our procedures for the receipt and consideration of director nominations by shareholders and other persons and for the receipt of shareholder communications directed to our Board | ||
make recommendations to the Board regarding management succession planning and corporate governance best practices |
A copy of our Nominating and Corporate Governance Committee charter is available withoutfree of charge on our website, www.net1.com.www.lesakatech.com.
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Social and Ethics Committee
The Social and Ethics Committee consists of Mses. Gobodo and Singh-Bushell and Mr. Pillay, with Ms. Gobodo acting as the Chairperson. The Social and Ethics Committee held three meetings during the 2023 fiscal year.
The Social and Ethics Committee was established to provide oversight of social and ethical matters related to our company and to ensure that we are and remain a committed socially responsible corporate citizen.
A copy of our Social and Ethics Committee charter is available free of charge on our website, www.lesakatech.com.
Capital Allocation Committee
The Capital Allocation Committee consists of Messrs. Ball, Mazanderani and Nkosi, with Mr. Ball acting as the Chairperson. The Capital Allocation Committee held one meeting during the 2023 fiscal year.
The principal duties and responsibilities of the Capital Allocation Committee are as follows:
Capital Allocation
| Investment Management
|
A copy of our Capital Allocation Committee charter is available free of charge on our website, www.lesakatech.com.
BOARD LEADERSHIP STRUCTURE AND BOARD OVERSIGHT OF RISK
Board Leadership
Our Board is led by an independent director, Mr. Seabrooke,Pillay, who is also ourserves as Chairman. Our Board believes this leadership structure effectively allocates authority, responsibility, and oversight between management and the independent members of our Board. It gives primary responsibility for our operational leadership and strategic direction to our Group Chief Executive Officer, while the ChairmanMr. Pillay facilitates our Board’sBoard's independent oversight of management, promotes communication between senior management and our Board about issues such as management development and succession planning, executive compensation, and our performance, engages with shareholders, and leads our Board’sBoard's consideration of key governance matters.
The Board’sBoard's Role in Risk Oversight
Managing risk is an ongoing process inherent in all decisions made by management. The Board discusses risk throughout the year, particularly at Board meetings when specific actions are considered for approval. The Board has ultimate responsibility to oversee our enterprise risk management program. This oversight is conducted primarily through various committees of the Board as described below.
Our Enterprise Risk ManagementThe Audit Committee is responsible forhas direct oversight of and actively assists the management team's process in identifying, assessing, prioritizing and developing action plans to mitigate the material business, operational and strategic risks affecting us. The Enterprise Risk Management Committee comprises Mr. Kotzé, our Chief Executive Officer (who serves as Chairperson) and Warren E. Segall, our Group Compliance Officer. Mr. Segall meets semi-annually with
Furthermore, the leaders of our various business units and his findings are reported to and discussed by the Enterprise Risk Management Committee. The Enterprise Risk Management Committee meets and reports to the Audit Committee semi-annually.
The Audit Committee directly provides oversight of risks relating to the integrity of our consolidated financial statements, internal control over financial reporting and the internal audit function. The Remuneration Committee oversees the management of risks related to our executive compensation program. The Nominating and Corporate Governance Committee oversees the management of risks related to management succession planning.
REMUNERATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of our Remuneration Committee has at any time been one of our officers or employees. None of our executive officers serves or in the past has served as a member of the Board or Remuneration Committee of any entity that has one or more of its executive officers serving on our Board or our Remuneration Committee.
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NOMINATIONS PROCESS AND DIRECTOR QUALIFICATIONS
The Nominating and Corporate Governance Committee reviews with the Board the skills and characteristics required of Board members. Our Corporate Governance Guidelines provide that the Nominating and Corporate Governance Committee consider a candidate’s independence, as well as the perceived needs of the Board and the candidate’s background, skills, business experience and expected contributions. At a minimum, members of the Board must possess the highest professional ethics, integrity and values, and be committed to representing the long-term interests of our shareholders. They must also have an inquisitive and objective perspective, practical wisdom and mature judgment.
The Nominating and Corporate Governance Committee may also take into account the benefits of diversity in candidates’ viewpoints, background and experience, as well as the benefits of constructive working relationships among directors. Other than as set forth in our Corporate Governance Guidelines, the Nominating and Corporate Governance Committee does not have a formal policy with respect to diversity.
The Nominating and Corporate Governance Committee also reviews and determines whether existing members of the Board should stand for re-election, taking into consideration matters relating to the number of terms served by individual directors, the ability of an individual director to devote the appropriate level of time and attention to Board duties in light of other positions he holds (including other directorships) and the changing needs of the Board. We do not have a limit on the number of terms an individual may serve as a director on our Board.
The Nominating and Corporate Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Nominating and Corporate Governance Committee regularly assesses the appropriate composition, size and independence of the Board, and whether any vacancies are expected due to change in employment or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Nominating and Corporate Governance Committee considers various potential candidates for director. Candidates are evaluated at regular or special meetings of the Nominating and Corporate Governance Committee, and may be considered at any point during the year. The Nominating and Corporate Governance Committee will consider shareholder recommendations for candidates for the Board that are properly submitted in accordance with Section 4.16 of our Amended and Restated By-Laws in the same manner it considers nominees from other sources. In evaluating such recommendations, the Nominating and Corporate Governance Committee will use the qualifications standards described above and will seek to achieve a balance of knowledge, experienceexperiences and capabilitycapabilities on the Board.
The Nominating and Corporate Governance Committee also reviews and determines whether existing members of the Board should stand for re-election, taking into consideration matters relating to the number of terms served by individual directors, the ability of an individual director to devote the appropriate level of time and attention to Board duties in light of other positions the individual director holds (including other directorships) and the changing needs of the Board. We do not have a limit on the number of terms an individual may serve as a director on our Board.
The Nominating and Corporate Governance Committee reviews with the Board the skills and characteristics required of Board members. Our Corporate Governance Guidelines provide that the Nominating and Corporate Governance Committee consider a candidate's independence, as well as the perceived needs of the Board and the candidate's background, skills, business experience and expected contributions. At a minimum, members of the Board must possess the highest professional ethics, integrity and values, and be committed to representing the long-term interests of our shareholders. They must also have an inquisitive and objective perspective, practical wisdom and mature judgment.
We believe that our board, as a group, have a balanced level of competencies and capabilities as demonstrated in the table below and our Nominating and Corporate Governance Committee considers each non-employees particular skill set when constituting its board committee. More detailed information on each of our director's experience, qualifications and skills is described in their biographies included above under Proposal No. 1:
The Nominating and Corporate Governance Committee may also take into account the benefits of diversity in candidates' viewpoints, backgrounds and experiences, as well as the benefits of constructive working relationships among directors. Other than as set forth in our Corporate Governance Guidelines, the Nominating and Corporate Governance Committee does not have a formal policy with respect to diversity.
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The below table reflects the board diversity matrix in accordance with Nasdaq Listing Rule 5605(f)(4):
| Board Diversity Matrix (as of our record date on September 22, 2023) | ||||
| Total number of directors: | 12 | |||
| Part I: Gender identity | Female | Male | Non-Binary | Did not disclose gender |
| Directors | 3 | 9 | 0 | 0 |
| Part II: Demographic Background | ||||
| African American or Black | 1 | 2 | 0 | 0 |
| Alaskan Native or Native American | 0 | 0 | 0 | 0 |
| Asian | 2 | 3 | 0 | 0 |
| Hispanic or Latinx | 0 | 0 | 0 | 0 |
| Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 |
| White | 0 | 3 | 0 | 0 |
| Two or More Races or Ethnicities | 0 | 1 | 0 | 0 |
| LGBTQ+ | 0 | |||
| Did Not Disclosure Background | 0 | |||
SHAREHOLDER COMMUNICATIONS WITH THE BOARD
Any shareholder who wishes to communicate directly with the Board may do so via mail, facsimile or facsimile,e-mail, addressed as follows:Net 1 UEPS
Lesaka Technologies, Inc.
Board of DirectorsPO
P.O. Box 2424
Parklands, 2121, South Africa
E-mail: phillipe.welthagen@lesakatech.com
Fax: +27 11 880 7080
Shareholders engaging with us are required to include their name and address in any such written or e-mail communication and also indicate whether the sender is a shareholder of our company. The corporate secretary shall transmit any communication to the Board, or individual director(s), as applicable, as soon as practicable upon receipt. Absent safety or security concerns, the corporate secretary shall relay all communications, without any other screening for content.
CORPORATE GOVERNANCE GUIDELINES
The Board has adopted a set of Corporate Governance Guidelines. We will continue to monitor our Corporate Governance Guidelines and adopt changes as necessary to comply with rules adopted by the SEC and Nasdaq, and to conform to best industry practice. This monitoring will include comparing our existing policies and practices to policies and practices suggested by various groups or authorities active in corporate governance and the practices of other public companies. The policy is currently under review to ensure that it appropriately aligns the interests of executive management and non-employee directors with other shareholders A copy of our Corporate Governance Guidelines is available free of charge on our website at www.net1.com.www.lesakatech.com.
CODE OF ETHICS
The Board has adopted a written code of ethics, as defined in the regulations of the SEC. We require all of our directors, officers, employees, contractors, consultants and temporary staff, including Mr. Kotzé,Messrs. Meyer, Kola, Heilbron and Mali, and other senior personnel performing similar functions, to adhere to this code in addressing the legal and ethical issues encountered in conducting their work. Our code of ethics requires avoidance of conflicts of interest, compliance with all laws and other legal requirements, conduct of business in an honest and ethical manner, integrity and actions in our best interest. Directors, officers and employees are required to report any conduct that they believe in good faith to be an actual or apparent violation of the code.
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The Sarbanes-Oxley Act of 2002 requires companies to have procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls or auditing matters and to allow for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters. We currently have such procedures in place. A copy of our code of ethics is available free of charge on our website at www.net1.com.www.lesakatech.com.
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SHARE OWNERSHIP GUIDELINES
We amended our share ownership guideline policy during fiscal 2023 to remove the requirement for our non-employee directors to own shares in our company. We have made this change as it aligns with share-holding practices applicable to non-employee directors in South Africa. Our amended share ownership guidelines remain applicable to our Group Chief Executive Officer and certain other executive officers. Our Group Chief Executive Officer is expected to own shares in our company that have a value of four times his annual base salary and our other executive officers are expected to own shares that have a value of two times their annual base salary. Shares may be owned directly by the individual, owned jointly with or separately by the individual's spouse, or held in trust for the benefit of the individual, the individual's spouse or children. Unvested time-based equity awards acquired through our stock incentive plan are included in the computation of share ownership.
COMPENSATION OF DIRECTORS
Directors who are also executive officers do not receive separate compensation for their services as directors. During fiscal 2017,2023, our non-employee directors received compensation as described below.
| Fees Earned or | Stock Awards(2)(3)(4) | Stock Options | ||||||||||
| Name | Paid in Cash ($)(1) | ($) | ($) | Total ($) | ||||||||
| Paul Edwards | 100,000 | 107,100 | - | 207,100 | ||||||||
| Alfred T. Mockett | 8,334 | - | - | 8,334 | ||||||||
| Alasdair J.K. Pein | 120,000 | 128,520 | - | 248,520 | ||||||||
| Christopher S. Seabrooke | 229,571 | 188,150 | - | 417,721 |
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| Name | Fiscal 2023 Total Fee Arrangement ($)(1) | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Stock Options ($) | Other ($)(2) | Total ($) | ||||||
| Antony C. Ball | 160,000 | 160,000 | - | - | 24,000 | 184,000 | ||||||
| Nonku N. Gobodo(3) | 154,500 | 154,500 | - | - | 22,959 | 177,459 | ||||||
| Ian O. Greenstreet(4) | 144,000 | 54,400 | - | - | - | 54,400 | ||||||
| Javed Hamid | 144,000 | 138,334 | - | - | - | 138,334 | ||||||
| Ali Mazanderani | 129,000 | 129,000 | - | - | - | 129,000 | ||||||
| Monde Nkosi | 134,000 | 134,000 | - | - | 20,100 | 154,100 | ||||||
| Kuben Pillay | 252,500 | 252,500 | - | - | 37,865 | 290,365 | ||||||
| Ekta Singh-Bushell | 206,000 | 206,000 | - | - | - | 206,000 |
In determining(1)Column represents total fiscal 20172023 fees for the full year.
(2)Represents value added taxes which are statutory indirect taxes charged in ZAR on Messrs. Ball, Nkosi and Pillay's and Ms. Gobodo's compensation and reimbursed to them.
(3)Mr. Hamid joined the Board analyzedaudit committee in November 2022 and fees paid to the Mr. Hamid have been pro-rated for the period of service during fiscal 2023.
(4)Mr. Greenstreet did not stand for re-election at our November 2022 annual compensation of non-employee directors of U.S.- and UK-listed transaction processor companies with a range of market equity capitalizations above, below and comparable to ours. The peer group comprised: Heartland Payment Systems, Inc., Global Payments Inc., WEX Inc., Euronet Worldwide, Inc., Total System Services, Inc., Verifone Systems, Inc., Jack Henry & Associates, Inc., Sage Group plc and Green Dot Corporation. In addition, the Board considered the various roles of the non-employee directors. meeting.
Directors receive a base fee for membership on the Board. Directors who serve on Board committees and/or serve as Chairperson of Board committees receive additional compensation in recognition of the additional time they are required to spend on committee matters. In fiscal 2020, we performed a benchmarking analysis against the annual compensation of non-employee directors of U.S., UK, and South African comparable companieswith a range of market equity capitalizations above, below and comparable to ours. We did not perform a similar analysis in fiscal 2023.
Grants of restricted stock made during 2017, as well those grants made in prior years, originally vested over a three-year period. After the end of fiscal 2017, the Board consulted with Pay Governance, an independent compensation consultant, and determined that one-year vesting of restricted stock grants is a more common compensation practice for independent directors and therefore, amended the terms of outstanding awards to vest one-year after grant. As a result of this amendment, all shares held at June 30, 2017 were fully-vested.
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information regarding our compensation plans under which our equity securities are authorized for issuance as of June 30, 2017:2023:
| Number of securities | |||||||||
| remaining available | |||||||||
| for future issuance | |||||||||
| Number of securities | under equity | ||||||||
| to be issued upon | Weighted average | compensation plans | |||||||
| exercise of | exercise price of | (excluding securities | |||||||
| outstanding options, | outstanding options, | reflected in column | |||||||
| warrants and rights | warrants and rights | (a)) | |||||||
| Plan Category | (a) | (b) | (c) | ||||||
| Equity compensation plans approved by security holders | |||||||||
| Stock incentive plan | 846,607 | $ | 13.88 | 3,864,034 |
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |||
| Equity compensation plans approved by security holders Stock incentive plan | 673,274 | $4.37 | 1,757,756 |
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EXECUTIVE COMPENSATION
ANALYSIS OF RISK IN OUR COMPENSATION STRUCTURE
As part of its responsibilities to annually review all incentive compensation and equity-based plans, andas well as evaluate whether the compensation arrangements of our employees incentivize unnecessary and excessive risk-taking, the Remuneration Committee evaluated the risk profile of our compensation policies and practices for fiscal 2017 and concluded that they do not motivate imprudent risk taking.2023. In its evaluation, the Remuneration Committee reviewed our employee compensation structures, and noted numerous design elements that manage and mitigate risk without diminishing the incentiveincentivizing nature of the compensation, including:
a balanced mix between cash and equity, and annual and longer-term incentives;
caps on incentive awards at reasonable levels;
linear payouts between target levels with respect to annual cash incentive awards;
discretion on individual awards, particularly in special circumstances; and
long-term incentives.
The Remuneration Committee also reviewed our compensation programs for certain design features that may have the potential to encourage excessive risk-taking, including: over-weighting towards annual incentives, highly leveraged payout curves, unreasonable thresholds, and steep payout cliffs at certain performance levels that may encourage short-term business decisions to meet payout thresholds. The Remuneration Committee concluded that our compensation programs do not include such elements.
In addition, the Remuneration Committee analyzed our overall enterprise risks and how compensation programs may impact individual behavior in a manner that could exacerbate these enterprise risks. For this purpose, the Remuneration Committee considered our growth and return performance, volatility and leverage. In light of these analyses, the Remuneration Committee concluded that it has a balanced pay and performance program that does not encourage excessive risk-taking that is reasonably likely to have a material adverse effect on us. We believe our compensation programs encourage and reward prudent business judgment and appropriate risk-taking over the long term.
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
In this Compensation Discussion and Analysis, we:
| |
As discussed below, our former Chief Executive Officer, Mr. S.C.P. Belamant retired nearcompensation philosophy and discuss how the endRemuneration Committee determines executive pay.
Describe each element of fiscal 2017. executive pay, including base salaries, short-term and long-term incentives and executive benefits.
We anticipatebelieve that there may be changes to our compensation programs and rewards in fiscal 2018 as we continue to develop and revise our philosophy regarding how besthave been designed to motivate our executives toand drive towardsbusiness value that is ultimately reflected in our short-termunderlying enterprise value for both the short- and long-term growth.long-term.
Pay for Performance
The Remuneration Committee considered the absolute and relative alignment of executive compensation when it considered the appropriateness of the level and form of compensation and found executive compensation and our performance to be aligned.
Results of Shareholder Say-on-Pay Votes
We provide our shareholders with the opportunity to cast an annual, nonbinding advisory vote to approve executive compensation (a “say-on-pay proposal”"say-on-pay proposal"). At our annual meeting of shareholders held on November 8, 2016,16, 2022, approximately 82%92% of the votes cast on the say-on-pay proposal at that meeting were voted in favor of the proposal. The Remuneration Committee considered the outcome of that advisory vote to be an endorsement of the Remuneration Committee’s compensation philosophy and implementation. The Remuneration Committee will continue to consider the outcome of say-on-pay votes when making future compensation decisions for our named executive officers.
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Highlighted Compensation Policies and Practices
Our executive compensation and corporate governance policies are structured to closely link executive compensation to our performance and increase long-term shareholder value.
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To achieve our objectives, we have incorporated the following policies and practices:
| WHAT WE DO: | WHAT WE | ||
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Our named executive officers for fiscal 20172023 are set forth in the following table:
| Name of Executive Officer | Title | |
| Group Chief Executive Officer and Director | ||
| Naeem E. Kola | Group Chief Financial Officer, Treasurer, Secretary and Director | |
| Executive | ||
| Chief Accounting Officer |
(1) Mr. Smith left our company on March 1, 2023.
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Fiscal 2023 Compensation Summary
Base Salary.Messrs. Kotzé, Soma, S.C.P. Belamant and P. M. Belamant received There were no base salary increases duringadjustments in fiscal 2017. Mr. Oh did not receive a base salary increase.2023.
Performance-Based Annual Cash Incentive.Messrs. S.C.P. BelamantMeyer, Kola, Heilbron and Kotzé did not receive anyMali received payments of $291,525, $181,080, $199,710 and $157,480, respectively, under the quantitative component of our cash incentive award plan, because noneand representing 53%, 56%, 79% and 56% of the maximum expected performance measures were achieved. Mr. Oh received 99% and 56%, respectively,range for the quantitative component of the potentialaward. Messrs. Meyer, Kola, Heilbron and Mali received payments of $233,350, $105,300, $118,475 and $132,387 respectively, under the quantitative and qualitative portionscomponent of hisour cash incentive award for fiscal 2017.
Discretionary Bonus.Mr. Kotzé received a bonus of $195,000 for fiscal 2017 in recognition of his assumption of additional responsibilities during our leadership change as well as the successful transitionplan, and representing 64%, 49%, 71% and 71% of the duties of Mr. S.C.P. Belamant. Mr. Soma received a bonus of $90,000.
Special Bonus.Mr. Soma received a special bonus of ZAR 1.5 million as compensationmaximum expected performance range for the additional internal management, workload and other pressures arising fromqualitative component of the separation of S.C.P. Belamant from our company.award.
Long-Term Equity Based Incentives.In August 2016,December 2022, we made an annual awardawarded 111,843, 68,319 and 77,706 shares of restricted stock to Messrs. Meyer, Kola and Mali, respectively. These share awards will only vest if our share price quoted on the Nasdaq grows on an annual compound basis of 10% per annum off a base of $4.94 over a measurement period from December 1, 2022 to December 1, 2025. The shares vest equally over a three-year period and if the annual price target is not achieved on either the first or second measurement date then all unvested shares of restricted stock which are available for vesting on the measurement date will be carried forward to the third year and will only vest if the target price is achieved on the third vesting date. Vesting of these shares of restricted stock are also subject to Messrs. Meyer, Kola and Mali's continued employment with us through to each vesting date. On December 31, 2022, we awarded 225,000 shares of time-based restricted stock to Mr. S.C.P. BelamantHeilbron. Vesting of these shares of restricted stock is subject to Mr. Heilbron's continued employment with us through June 30, 2024. If Mr. Heilbron's employment is terminated by us without cause then the shares of restricted stock will continue to vest on June 30, 2024, notwithstanding the fact that Mr. Heilbron is no longer an employee of the Issuer. If Mr. Heilbron's employment is terminated for cause, then any unvested shares will be forfeited
Other Share Awards. On December 31, 2022, we awarded 300,000 shares of our common stock to Mr. Heilbron. This award was fully vested on the grant date, and Mr. Kotzé with vesting based on our growth in earnings per share over a three year period with targets achieved at compounded growth at 10%, 12% and 15%. The Remuneration Committee considersHeilbron has undertaken not to sell or otherwise dispose of these growth rates to be challenging. 100% of FY 2017 long-term equity awards were performance based.
DEVELOPMENTS DURING AND POST FISCAL 2017
As a result of Mr. S.C.P. Belamant’s retirement effective Mayshares until December 31, 2017, Mr. Kotzé assumed the role of both Chief Executive Officer and Chief Financial Officer (along with his other roles). In addition, during August 2017, Mr. P. M. Belamant’s employment was terminated.
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We retained the services of an independent compensation consultant, Pay Governance, in June 2017.2023.
COMPENSATION PROGRAM OVERVIEW FOR FISCAL 20172023
The goal of our executive compensation program is the same as our goal for operating our Company—tocompany-to create long-term value for our shareholders. To achieve this goal, we seek to reward our named executive officers for sustained financial and operating performance and leadership excellence, to align their interests with those of our shareholders and to encourage them to remain with us for long and rewarding careers.
Each element of our executive compensation program is designed to fulfill one or more of our performance, alignment and retention objectives. These elements consist of salary, bonus and both equity and non-equity incentive compensation. Each named executive officer receives one or more, but not necessarily all, of these elements.
Compensation Components
In determining the type and amount of compensation for each executive officer, we focus on both current pay and the opportunity for future compensation and seek to combine compensation elements so as to optimize his or her contribution to us.
Pay Mix
We consider the mix of our compensation components from year to year based on our overall performance, an executive’sexecutive's individual contributions, and compensation practices of other U.S.-based and UK-basedSouth Africa-based public companies, including companies in our “peer group”"peer group" described below. We do not have an exact formula for allocating between cash and non-cash compensation. We do, nonetheless, provide for a balanced mix of compensation components that are designed to encourage and reward behavior that promotes shareholder value in both the shortshort- and long term.long-term.
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Our executive compensation program is designed to attract, motivate and retain key executive talent and promote strong, sustainable long-term performance. The three components of total direct compensation delivered in our program are 1) base salary; 2) performance-based cash annual incentive and/or annual bonus; and 3) performance-based long-term equity-based incentives. We place an emphasis on variable performance-based pay, with approximately 74% percent of total target compensation for fiscal 2017 established for Mr. S.C.P. Belamant based on achievement of performance objectives.pay. Each component promotes value creation and aligns our management team’steam's compensation with our long-term strategic objectives.
| Fixed/ Variable | Component | Form | Key Characteristics |
| Fixed | Base Salary | Cash | Base Salary increases are |
| determined based on market | |||
| considerations and do not | |||
| necessarily | |||
| Variable Compensation | Bonus | Cash | Bonus is discretionary and |
| dependent upon individual | |||
| performance | |||
| Performance-Based Cash Annual Incentive | Cash | Awards are based on | |
| qualitative and quantitative | |||
| factors | |||
| Performance-Based | Equity | Equity grants are subject to | |
| continued service | |||
| Other benefits | Cash | Benefits based on | |
| available to peer company | |||
| executives in similar position, | |||
| as |
15Pay Mix for Named Executive Officers
The chart below illustrates the mix of the elements of the fiscal 20172023 compensation program we established for our named executive officers using target levelsthe maximum expected performance range for the cash incentive component, “Bonus”where "Other" represents amounts paid to Mr. Kola for medical benefits. Equity awards exclude stock awarded to Mr. Heilbron and which vested on December 31, 2022, following the conclusion of 100%a new employment arrangement because these awards do not form part of his annual compensation program. Mr. Heilbron's awards includes restricted stock with time-based vesting conditions which were granted pursuant to his December 31, 2022 arrangement. The elements below include Mr. Heilbron's new annual base salary and “Other” representing a housing allowance paid to and group life payments paid on behalf of certain named executive officers:under the December 31, 2022 arrangement.
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Compensation Objectives
Performance. We seek to motivate our named executive officers through a combination of cash bonuses, incentive payments, grants of restricted stock with time-based vesting conditions, and grants of restricted stock that vest based on the achievement of pre-definedpredefined levels of financial and operating goals and increases in our share price and/or satisfaction of other financial and strategic performance goals. Base salary, bonus and non-equity incentive compensation are designed to reward annual achievements and be commensurate with each executive officer’sofficer's scope of responsibility, demonstrated ingenuity, dedication, leadership and management effectiveness.
Alignment. We seek to align the interests of our named executive officers with our shareholders by evaluating them on the basis of financial and non-financial measurements that we believe ultimately drive long-term shareholder value. The elements of our compensation package that we believe align these interests most closely are a combination of annual quantitative and qualitative cash compensation awards and restricted stock awards which vest over time and become vested upon the satisfaction of specified performance goals.
Retention. The long tenure of our management team, in particular, Messrs. Kotzé and Soma, has made them especially knowledgeable about our business and industry and thus particularly valuable to us. Retention is a key objective of our executive compensation program. We attempt to retain our named executive officers by seeking to provide a competitive pay package and using continued service as a condition to receipt of full compensation. The time-based vesting terms of equity awards have the effect of tying this element of compensation to continued service with us.
Implementing our Objectives
Organization of the Remuneration Committee
The Remuneration Committee typically holds four regularly scheduled meetings each year, with additional meetings scheduled when required. There are currently fourthree directors on the committee. Each member of the committee is required to be:
16An independent director under independence standards established by the Nasdaq.A non-employee director under Rule 16b-3 of the Securities Exchange Act of 1934, as amended.
Process and General Industry Benchmarking
The Remuneration Committee periodically analyzes compensation data of companies that it selects as a peer group to better understand how our pay package compares with those companies. The peer group selected by the Remuneration Committee compriseswould comprise a broad spectrum of companies, which range significantly in size from a revenue, profitability and enterprise value perspective. The peer group consistswould consist of payment processing companies generally considered comparable to us in terms of their businesses (such as being a payment systems provider) as well as other companies within other parts of the information technology sector and those operating in or providing services in emerging markets. In the early part of each fiscal year, the Remuneration Committee establishes base salaries and sets the short-term cash incentive award plan remuneration targets and payment criteria. Following the end of each fiscal year, the Remuneration Committee determines the annual incentive cash payments and bonuses, if any, to be made to each executive officer based on their and our performance during the fiscal year.
The Remuneration Committee’sCommittee's process for determining compensation includes an analysis of all elements of compensation. The Remuneration Committee compares these compensation components separately and in total to compensation at the peer group companies, taking into account, among other things, our relative market capitalization against the members of the peer group. For fiscal 2017, the Remuneration Committee set the compensation of Mr. Kotzé based on the total compensation package of Mr. S.C.P. Belamant. Since the role played by Mr. Kotzé was significantly broader than that of a typical Chief Financial Officer, the Remuneration Committee’s goal was to set this package at approximately 45% to 65% of Mr. S.C.P. Belamant’s total compensation package. The compensation of other named executive officers wasis generally determined based on specific performance criteria established by the Mr. S.C.P. Belamantour Group Chief Executive Officer and approved by the Remuneration Committee.
Our peer group,Employment and Other Agreements
We have entered into employment agreements and restrictive covenant agreements with each of Messrs. Meyer, Kola, Heilbron and Smith in connection with their roles as our Group Chief Executive Officer, Group Chief Financial Officer, Executive and Chief Accounting Officer, respectively. In addition, each of Messrs. Meyer, Kola, Mali and Smith and our wholly owned subsidiary, Lesaka Technologies Proprietary Limited, entered into contracts of employment ("SA Employment Contract") which includes both U.S.became effective on July 1, 2021, March 1, 2022, May 1, 2021, and UK listed companies, consistsMarch 1, 2022, respectively. All five executives have also entered into a restrictive covenant agreement with us. Each of the following companies: Heartland Payment Systems, Inc., Global Payments Inc., WEX Inc., Euronet Worldwide, Inc., Total System Services, Inc., Verifone Systems, Inc., Jack Henry & Associates, Inc., Sage Group plc and Green Dot Corporation.
Because the Remuneration Committee considered international comparables in its compensation analysis for both Messrs. S.C.P. Belamant and Kotzé, their total compensation packages were denominated in U.S. dollars (“USD”). Because Mr. Soma’s compensation package was derived from the amount of compensation we paid to Mr. Kotzé, his compensation package was also denominated in USD. Our otherthese executive officers basedis entitled to receive an annual base salary and an annual bonus/cash incentive award (as discussed above). The employment agreements provide that each of Messrs. Meyer, Kola, Heilbron, Mali and Smith's employment is at-will and all our current named officer's SA Employment Contracts provide that either party may terminate the agreement with three months' notice.
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Our named executive officers' restrictive covenant agreements provide that upon the termination of their services with us, each is restricted, for a period of 24 months, from soliciting business from certain customers, working for or holding interests in our competitors or participating in a competitive activity within the territories where we do business. Messrs. Meyer and Kola are restricted for a period of 12 months with respect to working for or holding interests in our competitors or participating in a competitive activity within the territories where we do business. Mr. Heilbron has signed a restraint of trade agreement and, under this agreement, he may not, either directly or indirectly, be associated or concerned with or interested or engaged in any Restricted Business (as defined in the agreement) or entity carrying on any Restricted Business, in South Africa, may electBotswana, Namibia and Zambia during the three years ended April 14, 2025, and his new employment arrangements concluded in December 2022, extend this period by three months. He is also prohibited from communicating with or furnishing any information or advice to be paidany Business Employee (as defined in the agreement) or to any prospective employer of such Business Employee for the direct or indirect purpose of inducing or causing a currencyBusiness Employee to leave the employ of the Protected Companies (as defined in the agreement) and/or becoming employed by or in any way directly or indirectly interested in or associated with any other than USD,business, including any Restricted Business.
On January 11, 2023, together with our wholly owned subsidiary, Lesaka Technologies (Pty) Ltd, we each entered into Mutual Separation Agreements with Mr. Smith (the "Separation Agreements"). The Separation Agreements provided for certain payments and other benefits to Mr. Smith, including without limitation, the following: (a) on-going base salary payments during his notice period to March 1, 2023, less applicable withholdings and deductions; (b) the payment of all outstanding leave as of March 1, 2023; (c) an ex-gratia payment of six times his monthly salary; (d) the removal of the on-going employment condition in which caseMr. Smith's existing stock option award agreement; and (e) the U.S. dollar amount is converted into South African Rand (“ZAR”) atremoval of the exchange rateon-going employment condition in effect atMr. Smith's existing restricted stock award agreements, however, the time of payment
Compensation for fiscal 2017 for Mr. Oh was determined in accordance with his service agreements. Mr. Oh’s compensation was denominated and paid in Korean won (KRW)awards will continue to vest in accordance with the vesting terms included in the existing restricted stock award agreements, which in certain instances include specific performance conditions. In addition, the Separation Agreement includes a reciprocal general release and waiver of his negotiated service agreements. Compensation for the other executives (exceptclaims related to Mr. Kotzé) was based on recommendations and input from Mr. S.C.P. Belamant with final approval by the Remuneration Committee.
Employment Agreements
From time to time, we enter intoSmith's employment agreements with senior executives of companies that we acquire in connection with the acquisition. Compensation under such employment agreements would not ordinarily be determined by reference to peer group comparisons. In June 2014, we entered into two service agreements with Mr. Oh in connection with his roles at Net1 Korea and KSNET. For more information about Mr. Oh’s service agreements, see “Performance-Based Annual Bonuses—Mr. Oh” below.Company.
Equity Grant Practices
We believe that our long-term performance is achieved through a culture that encourages long-term performance by our executive officers through the use of stock and stock-based awards. Accordingly, awards of restricted stock are a fundamental element in our executive compensation program because they emphasize long-term performance, and help align the interests of our shareholders and employees.
We have granted equity awards through our stock incentive plan which was adopted by our Board and approved by our shareholders. In determining the size of an equity award to an executive officer, the Remuneration Committee considers the executive’s thenexecutive's current cash total compensation package (which includes salary,salary; potential bonus and cash incentive award plan compensation),; any previously received equity awards,awards; the value of the grant at the time of awardthe award; and the number of shares available for grants pursuant to our stock incentive plan. When awarding equity compensation, management and the Remuneration Committee seek to weigh the cost of these grants with their potential benefits as a compensation tool.
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ELEMENTS OF 20172023 COMPENSATION
Base Salaries
Our executive compensation programs emphasize performance-based pay. This includes annual bonuses and equity –based long termequity-based long-term incentive awards. However, base salaries remain a necessary and typical part of compensation for attracting and retaining outstanding employees at all levels.
| Factors Considered in Determining Base Salaries | |||
Adjustments to Base Salary
Salaries for fiscal 2017 for allNone of our named executive officers except Mr. Oh were determined in the first quarter of fiscal 2017 after a review of our peer group companies described above. Messrs. Kotzé, P.M. Belamant, Soma and S.C.P. Belamant received base salary increases of 22%, 4%, 11% and 10%, respectivelyadjustments during fiscal 2017. 2023 outside of their employment agreements.
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Base Salary Determined Under Employment Agreements
Mr. Oh did not receiveHeilbron's new base salary adjustments for fiscal 2017 under the terms ofwas based on his service agreements. No other adjustments were made.employment agreement that became effective January 1, 2023, and was changed from an amount denominated in ZAR to a new agreed amount denominated in USD. His new base salary is $350,000 per annum.
Performance-Based Annual BonusesPay
Messrs. S.C.P. BelamantMeyer, Kola, Heilbron and KotzéMali
For fiscal 2017,2023, the Remuneration Committee established a cash incentive award plan for Messrs. S.C.P. BelamantMeyer, Kola, Heilbron and KotzéMali pursuant to which each of them would be eligible to earn a cash incentive award based on a number of quantitative factors that directly impacted our fiscal 20172023 financial performance and each individual’shis individual contribution toward the achievement of certain corporate objectives.
Mr. Meyer
The 2017cash incentive award plan provided for a target-levelan expected performance range cash incentive award of 100%between 70% and 140% of the executive’sMr. Meyer's annual base salary of $650,000 for fiscal 2017,2023. Under the plan, a 60% of whichweighing was to be based on a quantitative metric (achievement of specified levels of profitability before tax (“PBT”))factors and 40% was based on qualitative factors. The award could increase to a maximum of which was to be140% of Mr. Meyer's base salary based on the levelassessment of achievementperformance against both quantitative and qualitative targets.
Mr. Kola
The cash incentive award plan provided for an expected performance range cash incentive award of between 60% and 120% of Mr. Kola's annual base salary of $450,000 for fiscal 2023. Under the plan, a 60% weighing was based on quantitative factors and 40% was based on qualitative factors. The award could increase to a maximum of 120% of Mr. Kola's base salary based on the assessment of performance against both quantitative and qualitative targets.
Mr. Heilbron
The cash incentive award plan provided for an expected performance range cash incentive award of between 60% and 120% of Mr. Heilbron's annual base salary of $350,000 for fiscal 2023. Under the plan, a 60% weighting was based on quantitative factors described below.and 40% was based on qualitative factors. The award could increase to a maximum of 120% of Mr. Heilbron's base salary, based on the assessment of performance against both quantitative and qualitative targets.
Mr. Mali
The cash incentive award plan provided for an expected performance range cash incentive award of between 60% and 120% of Mr. Mali's annual base salary of ZAR 7,000,000 for fiscal 2023. Under the plan, a 60% weighting was based on quantitative factors and 40% was based on qualitative factors. The award could increase to a maximum of 120% of Mr. Mali's base salary, based on the assessment of performance against both quantitative and qualitative targets.
Quantitative Portion of the Cash Incentive Award Plan
Mr. Meyer was eligible to receive an amount equal to up to 42% to 84% of his annual base salary, and each of Messrs. Kola, Heilbron and Mali were eligible to receive an amount equal to 36% to 72% of their individual annual base salary if specified quantitative targets are achieved. The quantitative targets were as follows:
| Allocation of quantitative portion to quantitative targets | ||||||||
| Quantitative targets: | Meyer | Kola | Heilbron | Mali | ||||
| F2023 financial targets(A) | 30% | 30% | 20% | 20% | ||||
| Capital structure | 10% | 20% | - | - | ||||
| F2023 agreed Consumer segment key performance indicators(B) | 10% | 5% | - | 20% | ||||
| F2023 agreed Merchant segment key performance indicators(C) | 10% | 5% | 15% | - | ||||
| F2023 Consumer financial targets(D) | - | - | - | 20% | ||||
| F2023 Merchant financial targets(E) | - | - | 25% | - | ||||
| Total quantitative portion of cash incentive award plan | 60% | 60% | 60% | 60% | ||||
(A) F2023 financial targets includes (i) an improvement in Group Adjusted EBITDA, a non-GAAP measure, of at least ZAR 668 million compared with fiscal 2022 (a Group Adjusted EBITDA loss of ZAR 268 million), and (ii) an improvement in adjusted net loss before tax, a non-GAAP measure, of at least ZAR 400 million compared with fiscal 2022 (of ZAR 508 million). Group Adjusted EBITDA is net income (loss before interest, taxes, depreciation and amortization, adjusted for non-operational transactions (including loss on disposal of equity-accounted investments, gain related to fair value adjustments to currency options), (earnings) loss from equity-accounted investments, stock-based compensation charges, lease adjustments and once-off items. Lease adjustments reflect lease charges and once-off items represents non-recurring expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued.
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Adjusted net loss before tax is calculated as net loss before tax under GAAP, adjusted for non-recurring items (including gain on disposal of equity accounted investments), impairment loss, stock-based compensation charges, lease adjustments and certain components of depreciation and amortization.
(B) F2023 agreed Consumer segment key performance indictors include, (i) for Messrs. Meyer and Kola, Consumer EBITDA, active EPE accounts (excluding SRD (social relief of distress grant), average ARPU (average revenue per user), Consumer lending revenue, Consumer loan book as of June 30, 2023, and Consumer insurance revenue, and (ii) for Mr. Mali, average ARPU, active EPE accounts (excluding SRD) and Consumer loan book as of June 30, 2023.
(C) F2023 agreed Merchant segment key performance indictors include, (i) for Messrs. Meyer and Kola, Merchant EBITDA, Connect Capital loan advance, Cash Connect devices, Kazang POS devices and Kazang Pay throughput, and (ii) for Mr. Heilbron, Vault throughput, Connect Capital loan advance, Cash Connect devices, Kazang POS devices and Kazang Pay throughput and EasyPay performance.
(D) F2023 Consumer financial targets include Consumer EBITDA, Consumer lending revenue, and Consumer insurance revenue.
(E) F2023 Merchant financial targets include Merchant EBITDA and achievement of overall Merchant revenue targets.
The Remuneration Committee could award between 0% and 84% of Mr. Meyer's annual base salary, and between 0% and 72% of Messrs. Kola, Heilbron and Mali's annual base salary, based on its assessment of each executive's achievement against these quantitative portiontargets.
Qualitative Portion of the Cash Incentive Award Plan
Mr. Meyer was eligible to receive an amount up to 56% (i.e. 40% multiplied by 1.4 times) of his annual base salary based on his contribution towards enhancing shareholder value through performance criteria which include (with agreed weighting as a percent of total qualitative award provided(i.e. 40%) in parentheses):
- Deliver on the company's broad-based black economic empowerment objectives (5%);
- Deliver on the company's integration, culture and values objectives and strategy (10%);
- Execute various identified optimization and integration plans in fiscal 2023 (15%); and
- Deliver on any potential mergers and acquisitions ("M&A") objectives in fiscal 2023 (10%).
Mr. Kola was eligible to receive an amount up to 48% (i.e. 40% multiplied by 1.2 times) of his annual base salary based on his contribution towards enhancing shareholder value through performance criteria which include (with agreed weighting as a percent of total qualitative award (i.e. 40%) in parentheses):
- Deliver on the company's broad-based black economic empowerment objectives (5%);
- Execute various business improvement plans in fiscal 2023 (25%); and
- Deliver on any potential M&A objectives in fiscal 2023 (10%).
Mr. Heilbron was eligible to receive an amount up to 48% of his annual base salary based on his contribution towards enhancing shareholder value through performance criteria which include (with agreed weighting as a percent of total qualitative award (i.e. 40%) in parentheses):
- Deliver on the company's broad-based black economic empowerment objectives (5%);
- Deliver on the company's integration, culture and values objectives and strategy (5%);
- Execute various identified optimization and integration plans in fiscal 2023 (15%);
- Deliver on any potential M&A objectives in fiscal 2023 (10%); and
- Ensure appropriate succession plans in place for
threshold, targetmerchant segment (5%).
Mr. Mali was eligible to receive an amount up to 48% of his annual base salary based on his contribution towards enhancing shareholder value through performance criteria which include (with agreed weighting as a percent of total qualitative award (i.e. 40%) in parentheses):
- Deliver on the company's broad-based black economic empowerment objectives (5%);
- Deliver on the company's integration, culture and
maximum amounts of 0%, 100%values objectives and200%strategy (5%); - Execute various identified optimization and integration plans in fiscal 2023 (20%);
- Ensure appropriate succession plans in place for
Mr. S.C.P. Belamant,consumer segment (5%); and0%, 100% and 150% for Mr. Kotzé, respectively.
Deliver on stakeholder engagement strategy (5%).
The quantitative portionRemuneration Committee could award between 0% and 56% of the cash incentive award plan wasMr. Meyer's annual base salary, between 0% and 48% of Messrs. Kola, Heilbron and Mali's annual base salary, based on the achievementits assessment of specified levels of PBT for fiscal 2017. The following levels of PBT would entitle the executive to receive the following percentages of this portion of the award:each executive's progress against these qualitative targets.
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The achievement percentage was subject to interpolation relative to the $140 million target on a linear basis.
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Potential and Actual Payments
The table below presents our potential and actual payments to Messrs. S.C.P. BelamantMeyer, Kola, Heilbron and KotzéMali related to the quantitative portionand qualitative portions of our cash incentive award plan for fiscal 2017:2023:
| 2023 Quantitative and Qualitative portions of cash incentive award plan(1) | |||||||||||
| Expected performance range | |||||||||||
| Quantitative | Qualitative | ||||||||||
| Threshold | From | To | From | To | Total(2) | ||||||
| Chris G. B. Meyer | |||||||||||
| Potential payment | |||||||||||
| % | - | 42% | 84% | 28% | 56% | 140% | |||||
| $ | - | 273,000 | 546,000 | 182,000 | 364,000 | 910,000 | |||||
| Actual payment | |||||||||||
| % | 81% | ||||||||||
| $ | 524,875 | ||||||||||
| Naeem E. Kola | |||||||||||
| Potential payment | |||||||||||
| % | - | 36% | 72% | 24% | 48% | 120% | |||||
| $ | - | 162,000 | 324,000 | 108,000 | 216,000 | 540,000 | |||||
| Actual payment | |||||||||||
| % | 64% | ||||||||||
| $ | 286,380 | ||||||||||
| Steven J. Heilbron | |||||||||||
| Potential payment | |||||||||||
| % | - | 36% | 72% | 24% | 48% | 120% | |||||
| $ | - | 126,000 | 252,000 | 84,000 | 168,000 | 420,000 | |||||
| Actual payment | |||||||||||
| % | 107% | ||||||||||
| $ | 318,185 | ||||||||||
| Lincoln C. Mali(3) | |||||||||||
| Potential payment | |||||||||||
| % | - | 36% | 72% | 24% | 48% | 120% | |||||
| $ | - | 140,468 | 280,936 | 93,645 | 187,291 | 468,227 | |||||
| Actual payment | |||||||||||
| % | 73% | ||||||||||
| $ | 289,867 | ||||||||||
(1)All percentages are derived from base salary when cash incentive award was approved.
(2)Total percentage and USD amount for potential payment presented at the maximum amount of the cash incentive award. Percentage actual payment represents cash incentive award achieved divided by base salary for the executive when cash incentive was approved.
(3)Amounts translated to USD from ZAR at the average rate of exchange for fiscal 2023.
| 2017 Quantitative portion of cash incentive award plan | ||||||||||||
| Serge C.P. Belamant— | Herman G. Kotzé— | |||||||||||
| Chief Executive Officer | Chief Financial Officer | |||||||||||
| Potential | Potential | |||||||||||
| Payment | Actual | Payment | Actual | |||||||||
| ($) | ($) | ($) | ($) | |||||||||
| Threshold | 0 | 0 | 0 | 0 | ||||||||
| Target | $ | 660,000 | 0 | $ | 390,000 | 0 | ||||||
| Maximum | $ | 1,320,000 | 0 | $ | 585,000 | 0 | ||||||
| Actual | 0 | 0 | 0 | 0 | ||||||||
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In August 2017,September 2023, the Remuneration Committee met and determined each element of our financial performance described above.above and each executive's contribution toward the qualitative objectives. The Remuneration Committee, concludedafter consultation with Mr. Meyer, determined that no payment would be made because our income before income taxesthe executives had achieved the following quantitative targets and determined to award the USD amounts presented in the table below in respect of the quantitative component of the fiscal 2023 cash incentive award plan:
| Quantitative target and achieved percentages and USD amounts awarded | |||||||||||||||
| Meyer | Kola | Heilbron | Mali | ||||||||||||
| Quantitative targets: | Target | Achieved | Target | Achieved | Target | Achieved | Target | Achieved | |||||||
| Financial targets (%) | 30% | 17.93% | 30% | 17.14% | 20% | 12.20% | 20% | 11.17% | |||||||
| Capital structure (%) | 10% | 7.00% | 20% | 14.00% | - | - | - | - | |||||||
| Consumer segment KPIs (%) | 10% | 8.46% | 5% | 3.87% | - | - | 20% | 12.81% | |||||||
| Merchant segment KPIs (%) | 10% | 11.46% | 5% | 5.23% | 15% | 14.11% | - | - | |||||||
| Consumer financial targets (%) | - | - | - | - | - | - | 20% | 16.38% | |||||||
| Merchant financial targets (%) | - | - | - | - | 25% | 30.75% | - | - | |||||||
| Total (%) | 60% | 44.85% | 60% | 40.24% | 60% | 57.06% | 60% | 40.36% | |||||||
| Amount awarded ($)(1) | 291,525 | 181,080 | 199,710 | 157,480 | |||||||||||
(1)Amounts for Heilbron and Mali translated to USD from ZAR at the average rate of exchange for fiscal 2017 of $114.5 million was below the threshold PBT target of $130 million.2023.
Qualitative Portion of the Cash Incentive Award Plan
Each of Messrs. S.C.P. Belamant and Kotzé was entitled to receive up to 40% of his annual base salary based on his individual contribution toward the achievement of the following performance criteria:
In August 2017,September 2023, the Remuneration Committee considered whether to make payments in respect of the qualitative portion of the cash incentive award plan. The Remuneration Committee concluded that no payment would be made because nonedetermined to award Messrs. Meyer, Kola, Heilbron and Mali, $233,350; $105,300; $118,475 and ZAR 2,375,000 (or $132,387), respectively, of the performance criteria has been achieved for fiscal 2017 by Messrs. S.C.P. Belamant or Kotzé, respectively.qualitative portion of the cash incentive award.
In reaching its conclusion regarding Mr. Meyer's qualitative targets, the Remuneration Committee determined after a careful review of each factor that eitherMr. Meyer had substantially achieved his individual qualitative targets and the performance criteria had not been met or was still in progress.
Discretionary Bonus for Mr. Kotzé
The Remuneration Committee determined to award a bonushim 64.11% of 30% of fiscal 2017 base salary, or $195,000, to Mr. Kotzé. Although Mr. Kotzé had not met the performance measures set out in August 2016,his maximum qualitative target.
In reaching its conclusions regarding Messrs. Kola, Heilbron and Mali, the Remuneration Committee acknowledgedconsulted with Mr. Kotzé’s commitment and resolve through our leadership change. Mr. Kotzé successfully transitioned the dutiesMeyer, regarding each executive's achievement of their respective qualitative targets. Taking cognizance of Mr. S.C.P. Belamant and ensured as little disruption as possible to our operations. He successfully assumed additional responsibilities andMeyer's feedback on the performance of each named executive against their individual qualitative targets, the Remuneration Committee determined that this additional workload should be recognized in order to continue incentivizing Mr. Kotzé.award Messrs. Kola, Heilbron and Mali 48.75%, 70.52% and 70.69%, respectively of their maximum qualitative target.
19Pay Mix for Group Chief Executive Officer
The chart below illustrates the mix of the elements of the fiscal 20172023 compensation program we established for Mr. KotzéMeyer who was eligible for incentive compensation, using target levels for the cash incentive component.
Mr. Oh
For fiscal year 2017, Mr. Oh’s base salary was determined in accordance with the terms of his service agreements. We entered into two such service agreements with Mr. Oh in June 2014, in connection with his roles at Net1 Korea and KSNET. We appointed Mr. Oh as a representative director of Net1 Korea and entered into a three-year service agreement with him in conjunction with such appointment. Under these service agreements, Mr. Oh is entitled to receive annual base salary, an annual bonus (comprising quantitative and qualitative performance measures) and other benefits, including participation in national health insurancecomponent and the national pension plan provided underawards granted to him during the laws of Korea, reimbursement for annual physical examinations for him and his spouse, education expenses and the use of a Company-provided car and driver for business and reasonable personal use.year.
We have aligned KSNET’s fiscal year end with ours. However, in order to remain consistent with our Korean peer competitors, we continue to determine the quantitative portion of Mr. Oh’s annual bonus (and our KSNET staff’s remuneration) using KSNET’s financial results for the twelve month period ending
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Equity grants
Time-based Equity Incentive Awards
On December 31, of each year. Accordingly, we determined Mr. Oh’s cash incentive payment for the twelve month period ended December 31, 2016.
Similar2022, pursuant to the restraint of trade agreements that we have with our other named executive officers, Mr. Oh’s service agreement provides thathis new employment arrangement and upon the terminationrecommendation of his servicesthe Remuneration Committee, we awarded 225,000 shares of restricted stock to Mr. Heilbron. Vesting of these shares of restricted stock is subject to Mr. Heilbron's continued employment with us hethrough June 30, 2024. If Mr. Heilbron's employment is restricted, for a period of 36 months, from soliciting business from certain customers, working for or holding interests in our competitors or participating in a competitive activity within the territories where we do business. The service agreement also provides for certain payments upon his termination of serviceterminated by us without just cause which payments are described below under “Potential Payments Upon Termination or Change-in-Control”then the shares of restricted stock will continue to vest on page 28.June 30, 2024, notwithstanding the fact that Mr. Heilbron is no longer an employee of the Issuer. If Mr. Heilbron's employment is terminated for cause, then any unvested shares will be forfeited.
Quantitative Metrics
The quantitative portionOn December 31, 2022, Lesaka's Remuneration Committee also approved a sign on award of 300,000 shares of our common stock to Mr. Oh’s annual bonus is capped at a maximum of KRW 338 million and is calculated basedHeilbron. This award was fully vested on the achievementgrant date, and Mr. Heilbron has undertaken not to sell or otherwise dispose of specified levels of KSNET’s free cash flowthese shares until December 31, 2023.
No time-based equity incentive awards were made to Messrs. Meyer, Kola, Mali and profit before interest and tax and any bonus under his service agreement (“PBIT”)Smith during any calendar year during the term of the service agreement, as described below.fiscal 2023.
Mr. Oh is entitled to receive KRW 2 million for every KRWPerformance-based Equity Incentive Awards
On December 1, billion of free cash flow (defined as operating cash flow, minus tax and capital expenditures) during the year. The maximum payable in respect of the free cash flow metric is KRW 50 million.
If PBIT is at least 90% but less than 100% of the previous year’s PBIT, then Mr. Oh is entitled to receive (i) KRW 208 million, minus (ii) KRW 10 million for each 1% by which current PBIT is less than the previous year’s PBIT. If PBIT is equal to or greater than the previous year’s PBIT, then Mr. Oh is entitled to receive KRW 208 million, plus KRW 3,333,333 for each 1% increase in PBIT when compared to the previous year (up to a maximum of KRW 80 million in respect of the excess), for a total maximum of KRW 288 million.
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The table below presents our potential and actual payments to Mr. Oh related to the achievement of his quantitative targets for fiscal 2017:
| Cash flow metric | PBIT metric | Total | ||||||||||||||||
| Potential | Potential | Potential | ||||||||||||||||
| Payment | Actual | Payment | Actual | Payment | Actual | |||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||
| Threshold | 1,746 | 94,263 | 96,009 | |||||||||||||||
| Target | 1,746 | 181,543 | 183,289 | |||||||||||||||
| Maximum | 43,640 | 251,367 | 295,007 | |||||||||||||||
| Actual | 43,640 | 137,903 | 181,543 | |||||||||||||||
Qualitative Metrics
The qualitative portion of the annual bonus is capped at a maximum of KRW 182 million and is based on the achievement of certain key objectives to be determined annually by our Chairman. Each item comprising the qualitative portion is based on performance during our fiscal year ending June 30. Achievement of the qualitative targets will be determined by2022, our Remuneration Committee each year.
The qualitative targets for fiscal 2017 were:
| ||
| ||
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For fiscal 2017, the Remuneration Committee awarded $89,026 to Mr. Oh for the qualitative portion of his bonus. In reaching its award determination, the Remuneration Committee concluded that Mr. Oh had met two of his qualitative objectives for fiscal 2017: (1) maintaining or improving our market position in the Korean card VAN market and (2) KSNET not being subject to any adverse regulatory findings, fines or penalties. The Remuneration Committee determined that Mr. Oh had not successfully launched any of our products in Korea.
Other Executives
Bonuses for other Executives. The Remuneration Committee determined to award a bonus of 25%, or $90,000, of fiscal 2017 base salary to Mr. Soma, in recognition of his ongoing management of our strategic relationship with MasterCard and Grindrod Bank Limited and continuing oversight of the information technology component of our Sarbanes-Oxley compliance. These MasterCard and Grindrod Bank relationships continue to be vital to our South African businesses, including social welfare distribution and EasyPay Everywhere, as well as to our international expansion plans where a worldwide MasterCard agreement may provide us with competitive pricing and result in accelerated implementations The Remuneration Committee also determined to award Mr. Soma a special bonus of ZAR 1.5 million as compensation for the additional internal management, workload and other pressures arising from the separation of our former Chief Executive Officer.
Equity grants
Equity Incentive Awards
On August 25, 2016, we granted restricted stock to Messrs. S.C.P. BelamantMeyer, Kola and Kotzé that wouldMali, respectively. In order for any of the shares to vest, basedthe following conditions must be satisfied: (1) a compounded annual 10% appreciation in our stock price off a base price of $4.94 over the measurement period commencing on our growthDecember 1, 2022 through December 1, 2025, and (2) the executive officer is employed by us on a full-time basis when the condition in earnings per share over a three year period with targets achieved at compounded growth at 10%, 12% and 15%. S.C.P. Belamant was granted 200,000 shares of restricted stock and Mr. Kotzé was granted 150,000 shares of restricted stock representing approximately 200% of their current base salaries, respectively. The values(1) is met. If either of these grants are presented inconditions is not satisfied, then none of the Summary Compensation Table below. These shares of restricted stock will vest in full onlyand they will be forfeited.
The performance-based awards vest based on the date, if any, bothachievement of the following conditions are satisfied (except with respecttargeted stock price levels during the measurement period, of:
- Prior to
Mr. S.C.P. Belamant’sthe first anniversary of the grant date: 0%; - Fiscal 2024, stock price as
noted below):(i)the recipient is employed by us on a full-time basis on the date that we file our Annual Report on Form 10-K for the fiscal year ended June 30, 2019; and21(ii)the applicable fundamental earnings per share is achieve for the fiscal year ended June 30, 2019 (“2019 FEPS”) as described below.2019 FEPSVestingBelow $2.60 (threshold)0%At or above $2.60 but below $2.8033.33%At or above $2.80 but below $3.0066.67%Above $3.00100%The vesting percentageof December 1, 2023 issubject1.1 times higher (i.e. $5.43 or higher) than $4.94: 33%; - Fiscal 2025, stock price as of December 1, 2024 is 1.21 times higher (i.e. $5.97 or higher) than $4.94: 67%;
- Fiscal 2026, stock price as of December 1, 2025 is 1.331 times higher (i.e. $6.57) than $4.94: 100%.
No performance-based equity incentive awards were made to a linear interpolation between $2.60Messrs. Heilbron and $3.00 relative to 2019 Fundamental EPS of $2.80.
As a result of his retirement in May 2017, the performance conditions applicable to Mr. S.C.P. Belamant’s 2016 restricted stock grant were waived.
Other Compensation Items
The Remuneration Committee agreed to pay Mr. S.C.P. Belamant group life insurance premiums as well as provide him with a housing allowance. In addition,Smith during fiscal 2017, we provided on-site residential security services for Mr. S.C.P. Belamant consisting of two armed guards up until the end of January 2017. These services were provided based on bona fide business-related security concerns and were an integral part of our overall risk management program. The Board believes that provision of these security services is a necessary and appropriate business expense because Mr. S.C.P. Belamant’s personal safety and security were of the utmost importance to us and our shareholders. These security services may be viewed as conveying a personal benefit to Mr. S.C.P. Belamant during fiscal 2017.2023.
The Remuneration Committee agreed to pay Mr. P.M. Belamant’s group life insurance premiums and his participation in a tax equalization program under which we was reimburse, in cash, for any additional taxes paid as a result of his residence in the UK. The Remuneration Committee agreed to reimburse Mr. P.M. Belamant for two economy class seats per calendar year between South Africa and the UK.
RETIREMENT OF MR. S.C.P. BELAMANT
On May 31, 2017, our founder, Mr. S.C.P. Belamant, retired from his positions as our Chief Executive Officer and a member of our Board. In connection with his retirement,, we paid to Mr. S.C.P. Belamant a severance payment of US$1,000,000, representing compensation for 27 years of service with us, less applicable withholdings and deductions and a payment of US$7,000,000, less applicable withholdings and deductions, as an additional amount in part for his cooperative resignation. We also accelerated vesting of his 200,000 shares of restricted stock granted in August 2016 and repurchased his 1,017,465 shares of our common stock at a price of US$10.80 per share and his 252,286 in-the money stock options at a price per option equal to (i) US$10.80 minus (B) the applicable exercise price per option. See “Certain Relationships and Related Transactions” below.
MR. P.M. BELAMANT’S TERMINATION OF EMPLOYMENT
Effective August 10, 2017, ZAZOO Limited and Mr. Philip M. Belamant mutually agreed to terminate his employment.
OTHER CONSIDERATIONS
Section 162(m)
Section 162(m) of the Code places a limit of $1 million on the amount of compensation that we may deduct in any one year with respect to our Chief Executive Officer and each of the three most highly compensated executive officers other than our Chief Executive Officer or Chief Financial Officer. Certain qualified performance-based compensation is not subject to this deduction limit. To maintain flexibility in compensating our named executive officers in a manner designed to promote our various corporate goals, it is not a policy of the Remuneration Committee that all executive compensation must be tax-deductible. The Remuneration Committee believes that the importance of retaining this flexibility outweighs the benefits of tax deductibility.
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The Remuneration Committee’sCommittee's Advisors
In June 2017,November 2022, the Remuneration Committee retained Pay Governance, an independent advisor, to assist with amendments to its executive compensation matters.share retention guidelines. The committee has the sole authority to select, compensate and terminate its external advisors.
The Remuneration Committee has assessed Pay Governance’s independence pursuant to SEC rules and concluded that there are no conflicts of interest. Pay Governance is a nationally recognized independent advisor of executive compensation advisor services.
Clawback Policy
The Remuneration Committee adopted a clawback policy in February 2017 which applies to named executive officers who receive “incentive compensation.”"incentive compensation". For purposes of the Clawback Policy “incentive compensation”"incentive compensation" means any cash compensation or the portion of an award of cash compensation that is granted, earned or vested based wholly upon the attainment of a performance measure that is determinedetermined and presented in accordance with the accounting principles used in preparing our financial statements or derived wholly or in part from such measure and share price or total shareholder return. The policy requires the forfeiture, recovery or reimbursement of the incentive compensation earned within the two-year period preceding the date on which we are required to prepare an accounting restatement under the applicable plans as:
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Anti-hedgingrequired by applicable law; ordue to material noncompliance with any financial reporting requirement under U.S. securities laws that is caused by any current or former named executive officer's fraud or intentional misconduct that caused or substantially caused the need for such restatement.
Nasdaq has recently published new rules regarding clawback policies. We will update our clawback policy by the effective date to comply with these recently published Nasdaq rules.
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Anti-Hedging Policy
We maintain an anti-hedging policy, which prohibits employees and directors from trading in puts, calls, options or other future rights to purchase or sell shares of our common stock. Officers and directors are also prohibited from pledging their shares. An exception to this prohibition may be granted where a person wishes to pledge shares as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities. Any person wishing to enter into such an arrangement must first receive pre-approval for the proposed transaction from our Group Compliance Officer.
REMUNERATION COMMITTEE REPORT
For the Year Ended June 30, 20172023
The information contained in this report shall not be deemed to be “soliciting material”"soliciting material" or “filed”"filed" with the SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that Net 1 UEPSLesaka Technologies, Inc. specifically incorporates it by reference into a document filed under the Exchange Act.
The Remuneration Committee, which consists of fourthree independent directors, has reviewed and discussed the “Compensation"Compensation Discussion and Analysis”Analysis" section of this proxy statement with Mr. Kotzé.Meyer. Based on this review and discussion, the Remuneration Committee recommended to our Board that the “Compensation"Compensation Discussion and Analysis”Analysis" section be included in our Annual Report on Form 10-K and this proxy statement.
Remuneration CommitteeAlasdair J.K. Pein, ChairmanChristopher S. SeabrookePaul EdwardsAlfred T. Mockett
| Remuneration Committee Antony C. Ball, Chairman Monde Nkosi Kuben Pillay |
EXECUTIVE COMPENSATION TABLES
The following narrative, tables and footnotes describe the “total compensation”"total compensation" earned during fiscal years 2017, 20162023, 2022 and 2015,2021, as applicable, by our named executive officers. The total compensation presented below in the Summary Compensation Table does not reflect the actual compensation received by our named executive officers or the target compensation of our named executive officers in fiscal 2017. The actual value realized by our named executive officers in fiscal 2017 from long-term equity incentives (options and restricted stock) is presented in the Option Exercises and Stock Vested Table on page 28.2023.
Target annual incentive awards for fiscal 20172023 are presented in the Grants of Plan-Based Awards table on page 26.31.
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SUMMARY COMPENSATION TABLE(1)
The following table sets forth the compensation earned by our named executive officers for services rendered during fiscal years 2017, 20162023, 2022 and 2015.2021.
| Name and Principal Position | Year | Salary (2) ($) | Bonus (3) ($) | Stock Awards (4) ($) | Non-Equity Incentive Plan Compensation (3) ($) | All Other Compensation ($) | Total ($) | |||||||
| Chris Meyer, Group Chief Executive Officer and Director | 2023 | 650,000 | - | 257,985 | 524,875 | - | 1,432,860 | |||||||
| 2022 | 650,000 | - | 2,548,441 | 780,000 | - | 3,978,441 | ||||||||
| 2021 | - | - | - | - | - | 0 | ||||||||
| Naeem E. Kola, Group Chief Financial Officer, Treasurer, Secretary and Director | 2023 | 450,000 | - | 157,589 | 286,380 | 9,805(5) | 903,774 | |||||||
| 2022 | 150,000 | - | 1,000,000 | 150,000 | 1,839(5) | 1,301,839 | ||||||||
| 2021 | - | - | - | - | - | 0 | ||||||||
| Steven J. Heilbron, Chief Executive Officer: Connect Group and Director | 2023 | 296,682 | - | 2,388,750 | 318,185 | - | 3,003,617 | |||||||
| 2022 | 57,552 | - | - | - | - | 57,552 | ||||||||
| 2021 | - | - | - | - | - | 0 | ||||||||
| Lincoln C. Mali, Chief Executive Officer: Southern Africa and Director | 2023 | 394,609 | - | 179,242 | 289,867 | - | 863,718 | |||||||
| 2022 | 460,502 | - | 572,337 | 460,527 | - | 1,493,366 | ||||||||
| 2021 | 83,398 | - | 663,785 | - | - | 747,183 | ||||||||
| Alex M.R. Smith, Chief Accounting officer(6) | 2023 | 180,000 | - | - | - | 183,785(7) | 363,785 | |||||||
| 2022 | 364,240 | 179,139 | 97,495 | - | - | 640,874 | ||||||||
| 2021 | 395,650 | - | 265,200 | - | - | 660,850 |
(1)Includes only those columns relating to compensation awarded to, earned by, or paid to the named executive officers in any of fiscal 2023, 2022 or 2021. All other columns have been omitted.
(2)The applicable amount for Messrs. Meyer and Smith was denominated in USD and paid in ZAR at the exchange rate in effect at the time of payment. Mr. Kola's salary is denominated and paid in USD. Mr. Heilbron's salary includes a portion which was denominated and paid in ZAR and has been converted into USD at the average exchange rate for the applicable period up until December 31, 2022, and a portion denominated and paid in USD from January 1, 2023. Mr. Mali's salary was denominated and paid in ZAR, and has been converted into USD at the average exchange rate for that period.
(3)Bonus and non-equity incentive plan compensation represent amounts earned by Messrs. Meyer, Kola, Smith and Mali for the fiscal years ended June 30, 2023, 2022 and 2021. The amounts for Messrs. Meyer and Kola were denominated in USD, and the amounts for Messrs. Heilbron and Mali was denominated and paid in ZAR and converted into USD at the average exchange rate for the year in which the amount was earned. The amount of the bonus paid to Mr. Smith in fiscal 2022 includes the sum of $50,000 and $129,139 (which was denominated and paid in ZAR and has been converted into USD at the exchange rate on April 14, 2022, the date the bonus was earned).
(4)Represents FASB ASC Topic 718 grant date fair value of restricted stock granted under our stock incentive plan. See note 17 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended June 30, 2023, for the relevant assumptions used in calculating grant date fair value under FASB ASC Topic 718 and for detail regarding any conditions attached to the awards.
(5)Represents payments made by us for Mr. Kola's healthcare plan contributions, which are paid in ZAR converted into USD at the applicable monthly average exchange rates for the periods when paid.
(6)Fiscal 2023 includes amounts paid to Mr. Smith in his capacity as Chief Accounting Officer. Fiscal 2022 includes amounts paid to Mr. Smith in his capacity as Chief Financial Officer, Treasurer, Secretary and Director to February 28, 2022, and as Chief Accounting Officer from March 1, 2022. Fiscal 2021 and 2020 includes amounts paid to Mr. Smith in his capacity as Chief Financial Officer, Treasurer, Secretary and Director.
(7)Includes payments made to Mr. Smith pursuant to his mutual separation agreement, including a payment of outstanding leave of $48,785 and an ex-gratia payment of $135,000, which represents six times his monthly salary of $22,500.
| Stock | Option | Non-Equity | ||||||||||||||||||||||
| Salary | Bonus | Awards | Awards | Incentive Plan | All Other | |||||||||||||||||||
| (2) | (3) | (4) | (5) | Compensation (3) | Compensation | Total | ||||||||||||||||||
| Name and Principal Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||
| Herman G. Kotzé, Chief Executive | 2017 | 650,000 | 195,000 | 1,606,500 | - | - | 68,757 | (6) | 2,520,257 | |||||||||||||||
| Officer, Chief Financial Officer, | 2016 | 531,480 | 53,148 | 797,228 | - | 132,870 | 123,931 | (6) | 1,638,657 | |||||||||||||||
| Treasurer, Secretary and Director | 2015 | 516,000 | - | 146,229 | 200,970 | 696,600 | - | 1,559,799 | ||||||||||||||||
| Phil-Hyun Oh, | 2017 | 362,213 | - | - | - | 270,569 | 72,890 | (7) | 705,672 | |||||||||||||||
| President – | 2016 | 354,121 | - | 240,600 | - | 290,123 | 70,978 | (7) | 955,822 | |||||||||||||||
| KSNET | 2015 | 386,856 | - | - | 122,498 | 368,212 | 63,009 | (7) | 940,575 | |||||||||||||||
| Nitin Soma, Vice-President- | 2017 | 360,000 | 200,147 | - | - | - | - | 560,147 | ||||||||||||||||
| Information | 2016 | 324,450 | 113,558 | 240,600 | - | - | - | 678,608 | ||||||||||||||||
| Technology | 2015 | 315,000 | 315,000 | 77,850 | 122,498 | - | - | 830,348 | ||||||||||||||||
| Serge C.P. Belamant, Former Chief | 2017 | 1,008,333 | - | 2,142,000 | - | - | 8,442,836 | (9) | 11,593,169 | |||||||||||||||
| Executive Officer, Chairman of the Board | 2016 | 1,004,250 | 100,425 | 2,008,509 | - | 251,063 | 239,007 | (9) | 3,603,254 | |||||||||||||||
| and Director(8) | 2015 | 975,000 | - | 276,213 | 379,613 | 1,657,500 | 24,810 | (9) | 3,313,136 | |||||||||||||||
| Philip M. Belamant, Managing Director – | 2017 | 168,130 | - | - | - | - | 167,468 | (11) | 335,598 | |||||||||||||||
| ZAZOO Limited(10) | 2016 | 189,387 | 66,772 | 232,580 | - | - | 268,948 | (11) | 757,687 |
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PAY RATIO DISCLOSURE Mr. Meyer, who served as our Group Chief Executive Officer during fiscal 2023, had total compensation for fiscal year 2023 of $1,432,860, as reflected in the Summary Compensation Table above. We have selected June 30, 2023, as the date to identify our median employee. As of June 30, 2023, we had 2,303 employees and we have used these 2,303 employees as our pay ratio disclosure population. Almost all of our employees included in this population are based in jurisdictions outside of the United States and the vast majority, approximately 99%, of these employees, are employed in South Africa and contribute to our merchant and consumer businesses. We have used the annualized functional currency base salary of our employees included in our pay ratio disclosure population as of June 30, 2023, and calculated the United States dollar equivalent of these salaries by converting the functional currency amounts to United States dollars using exchange rates as of June 30, 2023. We have sorted this list from lowest to highest and we estimate that our median employee had a United States dollar equivalent salary of $8,342 as of June 30, 2023. Mr. Meyer's fiscal year 2023 base salary was approximately 78 times that of our median employee, and Mr. Meyer's fiscal year 2023 total compensation was approximately 172 times that of our median employee's base salary. The pay ratio identified above is a reasonable estimate calculated in a manner consistent with SEC rules. Pay ratios that are reported by our peers may not be directly comparable to ours because of differences in the composition of each company's workforce, as well as the assumptions and methodologies used in calculating the pay ratio, as permitted by SEC rules. | |
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ACTUAL 20172023 COMPENSATION MIX
The chart below illustrates the mix of the actual elements of the compensation program paid in fiscal 20172023 for our named executive officers pursuant to our target incentive compensation program:officers:
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GRANTS OF PLAN-BASED AWARDS(1)
The following table provides information concerning non-equity and equity incentive plan awards granted during fiscal 20172023 to each of our named executive officers.
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards (2) | All Other Stock Awards: Number of Shares of Stock or Units | Grant Date Fair Value of Stock and Option Awards | ||||||||||||||||||||||
| Name | Grant Date | Date of Committee Action | Type of Award | Threshold ($) | Target ($)(3) | Maximum ($) | (#) | ($) | ||||||||||||||||
| Chris Meyer | - | 09/29/22 | AC | - | 70% - 140% | 910,000 | ||||||||||||||||||
| 12/01/22 | 12/01/22 | RS | 111,843 | 257,985 | ||||||||||||||||||||
| Naeem E. Kola | - | 09/29/22 | AC | 60% - 120% | 540,000 | |||||||||||||||||||
| 12/01/22 | 12/01/22 | RS | 68,319 | 157,589 | ||||||||||||||||||||
| Steven J. Heilbron | 09/29/22 | AC | 60% - 120% | 281,840 | ||||||||||||||||||||
| 12/31/22 | 12/31/22 | RS | 300,000 | 1,365,000 | ||||||||||||||||||||
| 12/31/22 | 12/31/22 | RS | 225,000 | 1,023,750 | ||||||||||||||||||||
| Lincoln Mali | - | 09/29/22 | AC | - | 60% - 120% | 468,227 | ||||||||||||||||||
| 12/01/22 | 12/01/22 | RS | 77,706 | 179,242 | ||||||||||||||||||||
___________________
(1)AC (annual cash incentive award); RS (restricted stock). Includes only those columns relating to grants awarded to the named executive officers in fiscal 2023. All other columns have been omitted.
(2)On September 29, 2022, the Remuneration Committee approved a fiscal 2023 cash incentive award plan for Messrs. Meyer, Kola, Heilbron and Mali. The plan and the actual payments made thereunder are described in detail under "-Compensation Discussion and Analysis-Elements of 2023 Compensation-Performance-Based Pay-Messrs. Meyer, Kola, Heilbron and Mali-Potential and Actual Payments". There was no threshold for the qualitative portion of the award plan. Messrs. Heilbron and Mali's amounts translated from ZAR to USD using the average rate of exchange for the year ended June 30, 2023.
(3)Target represents the expected performance range (refer to "-Compensation Discussion and Analysis-Elements of 2023 Compensation-Performance-Based Pay".
| All Other | ||||||||||||||||||||||||
| Stock | ||||||||||||||||||||||||
| Awards: | Grant Date | |||||||||||||||||||||||
| Number of | Fair Value | |||||||||||||||||||||||
| Estimated Future Payouts Under Non- | Shares of | of Stock | ||||||||||||||||||||||
| Equity Incentive | Stock or | and Option | ||||||||||||||||||||||
| Plan Awards (2) | Units | Awards | ||||||||||||||||||||||
| Date of | ||||||||||||||||||||||||
| Grant | Committee | Type of | Threshold | Target | Maximum | |||||||||||||||||||
| Name | Date | Action | Award | ($) | ($) | ($) | (#) | ($) | ||||||||||||||||
| - | 08/25/16 | AC | 22,750 | 650,000 | 845,000 | |||||||||||||||||||
| Herman G. Kotzé | 08/19/15 | 08/25/16 | RS | 150,000 | 1,606,500 | |||||||||||||||||||
| Phil-Hyun Oh | 06/30/14 | AC | 96,008 | 342,139 | 453,858 | |||||||||||||||||||
| - | 08/25/16 | AC | 38,500 | 1,100,000 | 1,760,000 | |||||||||||||||||||
| Serge C.P. Belamant(3) | 08/19/15 | 08/25/16 | RS | 200,000 | 2,142,000 | |||||||||||||||||||
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OUTSTANDING EQUITY AWARDS AT 20172023 FISCAL YEAR-END
The following table shows all outstanding equity awards held by our named executive officers at the end of fiscal 2017.2023. The market value of unvested shares reflected in this table is calculated by multiplying the number of unvested shares by the per share closing price of $9.86$3.81 of our common stock on June 30, 2017,2023, the last trading day of the fiscal year.
| Stock Awards | |||||||||||||
| Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||
| Chris Meyer | 117,304(1 | ) | 446,928 | ||||||||||
| 58,652(2 | ) | 223,464 | |||||||||||
| 58,652(3 | ) | 223,464 | |||||||||||
| 157,601(4 | ) | 600,460 | |||||||||||
| 111,843(5 | ) | 426,122 | |||||||||||
| Naeem E. Kola | 126,263(6 | ) | 481,062 | ||||||||||
| 68,319(5 | ) | 260,295 | |||||||||||
| Steven J. Heilbron | 225,000(7 | ) | 857,250 | ||||||||||
| Lincoln C. Mali | 25,680(8 | ) | 97,841 | ||||||||||
| 73,734(9 | ) | 280,927 | |||||||||||
| 29,918(10 | ) | 113,988 | |||||||||||
| 77,706(5 | ) | 296,060 | |||||||||||
(1)These shares of restricted stock were awarded in July 2021, and will vest in full on June 30, 2024, subject to the continued employment of the recipient on a full-time basis on the vesting date.
(2)These shares of restricted stock were awarded in July 2021 and will vest in full subject to the following conditions: (1) our company achieving our three year financial services plan during the specific measurement period from June 30, 2021 to June 30, 2024, and (2) the recipient is employed by us on a full-time basis on June 30, 2024, when the condition in (1) is met.
(3)These shares of restricted stock were awarded in July 2021 and will vest in full subject to the satisfaction of the following conditions: (1) the price of our common stock is equal to or exceeds certain stock price levels during specific measurement periods from June 30, 2021 to June 30, 2024, and (2) the recipient is employed by us on a full-time basis when the condition in (1) is met.
(4)These shares of restricted stock were awarded in November and December 2021, and one third of these shares are scheduled to vest on each of July 1, 2022, 2023 and 2024, with vesting conditioned upon continuous service through the applicable vesting date.
(5)These shares of restricted stock were awarded in December 2022 and will vest in full subject to the satisfaction of the following conditions: (1) the price of our common stock is equal to or exceeds certain stock price levels during specific measurement periods from December 31, 2022 to December 1, 2025, and (2) the recipient is employed by us on a full-time basis when the condition in (1) is met.
(6)These shares of restricted stock were awarded in March 2022, and one third of these shares are scheduled to vest on each of March 1, 2023, 2024 and 2025, with vesting conditioned upon continuous service through the applicable vesting date.
(7)These shares of restricted stock were awarded in December 2022, and will vest in full on June 30, 2024, subject to the continued employment of the recipient on a full-time basis on the vesting date. If the Mr. Heilbron's employment is terminated by us without cause then the shares of restricted stock will continue to vest on June 30, 2024, notwithstanding the fact that Mr. Heilbron is no longer an employee of the Issuer. If Mr. Heilbron's employment is terminated for cause, then any unvested shares will be forfeited
(8)These shares of restricted stock were awarded in May 2021, and are scheduled to vest on May 1, and 2024, with vesting conditioned upon continuous service through the applicable vesting date.
(9)These shares of restricted stock were awarded in May 2021 and will vest in full subject to the satisfaction of the following conditions: (1) the price of our common stock is equal to or exceeds certain stock price levels during specific measurement periods from June 30, 2021 to June 30, 2024, and (2) the recipient is employed by us on a full-time basis when the condition in (1) is met.
(10)These shares of restricted stock were awarded in December 2021, and are scheduled to vest on May 1, 2024, with vesting conditioned upon continuous service through the applicable vesting date.
| Option Awards | Stock Awards | |||||||||||||||||||||||
| Equity | Equity | |||||||||||||||||||||||
| Number | Incentive | Incentive Plan | ||||||||||||||||||||||
| Number | of | Market | Plan Awards: | Awards: | ||||||||||||||||||||
| of | Securities | Number | Value of | Number of | Market or | |||||||||||||||||||
| Securities | Underlying | of Shares | Shares or | Unearned | Payout Value of | |||||||||||||||||||
| Underlying | Unexer- | or Units | Units of | Shares, Units | Unearned | |||||||||||||||||||
| Unexer- | cised | of Stock | Stock | or Other | Shares, Units or | |||||||||||||||||||
| cised | Options | Option | That | That | Rights That | Other Rights | ||||||||||||||||||
| Options | (#) | Exercise | Option | Have Not | Have Not | Have Not | That Have Not | |||||||||||||||||
| (#) | Unexer- | Price | Expiration | Vested | Vested | Vested | Vested | |||||||||||||||||
| Name | Exercisable | cisable | ($) | Date | (#) | ($) | (#) | ($) | ||||||||||||||||
| 100,000 | - | $ | 24.46 | 8/24/2018 | 44,178 | (2) | 435,595 | |||||||||||||||||
| 110,000 | - | $ | 13.16 | 5/20/2019 | 39,762 | (3) | 392,053 | |||||||||||||||||
| 67,000 | - | $ | 10.59 | 11/10/2020 | 150,000 | (4) | 1,479,000 | |||||||||||||||||
| 20,000 | - | $ | 7.98 | 10/28/2021 | - | - | ||||||||||||||||||
| 18,000 | - | $ | 8.75 | 08/22/2022 | - | - | ||||||||||||||||||
| 42,856 | - | $ | 7.35 | 08/21/2023 | - | - | ||||||||||||||||||
| Herman G. Kotzé. | 29,452 | 14,726 | (1) | $ | 11.23 | 08/27/2024 | - | - | ||||||||||||||||
| Phil-Hyun Oh. | 17,952 | 8,976 | (1) | $ | 11.23 | 08/27/2024 | 12,000 | (4) | 118,320 | |||||||||||||||
| 60,000 | - | $ | 24.46 | 8/24/2018 | 24,328 | (5) | 239,874 | |||||||||||||||||
| 60,000 | - | $ | 13.16 | 5/20/2019 | 12,000 | (4) | 118,320 | |||||||||||||||||
| Nitin Soma | - | 8,976 | (1) | $ | 11.23 | 08/27/2024 | - | - | ||||||||||||||||
| Serge C.P. Belamant(6) | - | - | - | - | - | - | ||||||||||||||||||
| 13,333 | 6,667 | $ | 11.23 | 08/27/2024 | 11,035 | (5) | 108,805 | |||||||||||||||||
| Philip M. Belamant(7) . | - | - | - | - | 11,600 | (4) | 114,376 | |||||||||||||||||
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OPTION EXERCISES AND STOCK VESTED
There were no stock options exercised by our named executive officers. The following table shows all stock options exercised and value realized upon exercise as well as all stock awards that vested and theduring fiscal 2023:
| Stock Awards | ||||||
| Name | Number of shares acquired on vesting (#) | Value Realized on Vesting ($)(1) | ||||
| Chris G. B. Meyer | 78,801 | 409,765 | ||||
| Naeem E. Kola | 63,131 | 296,716 | ||||
| Steven J. Heilbron | 300,000 | 1,365,000 | ||||
| 25,680 | 90,394 | |||||
| Lincoln C. Mali | 29,919 | 105,315 | ||||
(1)The value realized on vesting is calculated as the closing price of our common stock on the vesting date multiplied by the number of common shares of restricted stock that vested.
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PAY VERSUS PERFORMANCE DISCLOSURES
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K promulgated under the Exchange Act, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of our company. Refer to the Compensation Discussion and Analysis section for further information concerning our variable pay-for-performance philosophy and how it aligns executive compensation with our performance.
| Year | Summary compensation table total for first PEO (1)(5) | Summary compensation table total for second PEO (2)(5) | Summary compensation table total for third PEO (3)(5) | Compensation actually paid to first PEO (1)(6) | Compensation actually paid to second PEO (2) (6) | Compensation actually paid to third PEO (3) (6) | Average summary compensation table total for non-PEO NEOs (4)(7) | Average compensation actually paid to non-PEO NEOs (4)(8) | Value of initial fixed $100 investment based on: | Net loss $ '000 | Group Adjusted EBITDA ZAR '000 (11) | ||||||||||||||||||||||||||
| Total share- holder return (9) | Peer group total share- holder return (10) | ||||||||||||||||||||||||||||||||||||
| 2023 | N/A | N/A | $1,432,860 | N/A | N/A | $833,154 | $1,283,723 | $925,470 | $42 | $259 | ($35,074 | ) | 497,584 | ||||||||||||||||||||||||
| 2022 | N/A | N/A | $3,978,441 | N/A | N/A | $3,996,918 | $873,407 | $773,282 | $57 | $167 | ($43,876 | ) | (267,709 | ) | |||||||||||||||||||||||
| 2021 | $666,456 | $660,850 | N/A | ($467,628 | ) | $836,675 | N/A | $444,634 | $286,440 | $52 | $130 | ($38,057 | ) | (603,738 | ) | ||||||||||||||||||||||
| 2020 | $2,961,432 | N/A | N/A | $2,513,253 | N/A | $694,485 | $621,990 | $33 | $122 | ($78,358 | ) | (430,933 | ) | ||||||||||||||||||||||||
| 2019 | $1,109,028 | N/A | N/A | ($803,687 | ) | N/A | $674,037 | $452,672 | $44 | $110 | ($311,007 | ) | (951,563 | ) | |||||||||||||||||||||||
(1)First Principal Executive Officer ("PEO") was Herman G. Kotzé. Mr. Kotzé's employment with the Company terminated on September 30, 2020.
(2)Second PEO was Mr. Smith. Mr. Smith served as our interim Chief Executive Officer following the departure of Mr. Kotzé. Mr. Smith was interim Chief Executive Officer from September 2020 through to the appointment of Mr. Meyer in July 2021. Mr. Smith is not included in the group of Named Executive Officers ("NEOs") in fiscal 2021.
(3)Third PEO is our current Group Chief Executive Officer, Mr. Meyer.
(4)2023 comprises four NEOs: Messrs. Kola, Heilbron, Mali, and Smith;
2022 comprises four NEOs: Messrs. Kola (from March 1, 2022), Heilbron (from April 14, 2022), Mali and Smith;
2021 comprises three NEOs: Messrs. Mali (from May 1, 2021), Nunthakumarin Pillay (terminated employment on April 30, 2021), and Phillip S. Meyer (terminated employment on October 30, 2020);
2020 comprises four NEOs: Messrs. Smith, N. Pillay, P.S. Meyer, and Phil-Hyun Oh (terminated employment on March 9, 2020); and
2019 comprises five NEOs: Messrs. Smith, N. Pillay, P.S. Meyer, Oh and Nitin Soma (terminated employment on June 30, 2019).
(5)Represents the amount of total compensation reported for each PEO for each corresponding fiscal year in the "Total" column of the Summary Compensation Table for each applicable fiscal year.
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(6)Represents the amount of "compensation actually paid" to the first, second and third PEO's respectively, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not necessarily reflect the actual amount of compensation earned by or paid to the respective PEO during the applicable fiscal 2017.year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the respective PEO's total Summary Compensation Table compensation for each year to determine the compensation actually paid:
| Stock Options | Stock Awards | |||||||||||
| Number | ||||||||||||
| Number of | Value | of shares | ||||||||||
| shares | Realized | acquired | Value | |||||||||
| acquired on | on | on | Realized | |||||||||
| Exercise | Exercise | vesting | on Vesting | |||||||||
| Name | (#) | ($)(1) | (#) | ($)(2) | ||||||||
| Herman G. Kotzé | - | - | - | - | ||||||||
| Phil-Hyun Oh | - | - | 4,445 | 42,894 | ||||||||
| 16,666 | (3) | 215,129 | 18,333 | 248,045 | ||||||||
| 26,122 | (4) | 338,478 | - | - | ||||||||
| Nitin Soma | 17,952 | (5) | 231,909 | - | - | |||||||
| Serge C.P. Belamant(6) | - | - | - | - | ||||||||
| Philip Belamant(7) | - | - | 3,333 | 32,163 | ||||||||
| First PEO | Second PEO | Third PEO | ||||||||||||||||||||||||||||||||||
| Year | Summary compen- sation table total | Reported value of equity awards (a) | Equity award adjustments (b) | Compen- sation actually paid | Summary compen-sation table total | Reported value of equity awards (a) | Equity award adjustments (b) | Compen- sation actually paid | Summary compen- sation table total | Reported value of equity awards (a) | Equity award adjustments (b) | Compen- sation actually paid | ||||||||||||||||||||||||
| 2023 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $1,432,860 | ($257,985 | ) | ($341,721 | ) | $833,154 | ||||||||||||||||||||||
| 2022 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $3,978,441 | ($2,548,441 | ) | $2,566,918 | $3,996,918 | |||||||||||||||||||||||
| 2021 | $666,456 | ($225,116 | ) | ($908,968 | ) | ($467,628 | ) | $660,850 | ($265,200 | ) | $441,025 | $836,675 | N/A | N/A | N/A | N/A | ||||||||||||||||||||
| 2020 | $2,961,432 | ($1,352,700 | ) | $904,521 | $2,513,253 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||
| 2019 | $1,109,028 | ($161,820 | ) | ($1,750,895 | ) | ($803,687 | ) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||
(a)The grant date fair value of equity awards represents the total of the amounts reported in the "Stock Awards" and "Option Awards" columns in the Summary Compensation Table for the applicable fiscal year.
(b)The equity award adjustments for each applicable fiscal year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable fiscal year that are outstanding and unvested as of the end of the fiscal year; (ii) the amount of change as of the end of the applicable fiscal year (from the end of the prior fiscal year) in fair value of any awards granted in prior fiscal years that are outstanding and unvested as of the end of the applicable fiscal year; (iii) for awards that are granted and vest in same applicable fiscal year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable fiscal year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; an d(v) for awards granted in prior fiscal years that are determined to fail to meet the applicable vesting conditions during the applicable fiscal year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable fiscal year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable fiscal year (there were no adjustments related to item (vi)). The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows (only applicable years presented for each respective PEO):
| Year | (i) Year End Fair Value of Unvested Covered Year Equity Awards | (ii) Year over Year Change in Fair Value of Outstanding and Unvested Prior Year Equity Awards | (iii) Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | (iv) Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | (v) Awards Granted in Prior Fiscal Years that are Determined to Fail to Meet the Applicable Vesting Conditions During the Applicable Fiscal Year | Equity award adjustments | ||||||||||||
| First PEO | ||||||||||||||||||
| 2021 | $0 | $0 | $0 | $95,818 | ($1,004,786 | ) | ($908,968 | ) | ||||||||||
| 2020 | $1,015,360 | ($155,066 | ) | $0 | $44,227 | $0 | $904,521 | |||||||||||
| 2019 | $94,105 | ($480,000 | ) | $0 | $0 | ($1,365,000 | ) | ($1,750,895 | ) | |||||||||
| Second PEO | ||||||||||||||||||
| 2021 | $252,450 | $157,657 | $0 | $30,918 | $0 | $441,025 | ||||||||||||
| Third PEO | ||||||||||||||||||
| 2023 | $203,927 | ($550,377 | ) | $0 | $4,729 | $0 | ($341,721 | ) | ||||||||||
| 2022 | $2,267,323 | $0 | $299,595 | $0 | $0 | $2,566,918 | ||||||||||||
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(7)Represents the average of the amounts reported for our non-PEO NEOs as a group in the "Total" column of the Summary Compensation Table in each applicable fiscal year.
(8)Represents the average amount of "compensation actually paid" to the non-PEO NEOs as a group, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not necessarily reflect the actual average amount of compensation earned by or paid to the non-PEO NEOs as a group during the applicable fiscal year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total Summary Compensation Table compensation for the non-PEO NEOs as a group for each year to determine the compensation actually paid:
| Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs | Average Reported Value of Equity Awards (a) | Average Equity Award Adjustments (b) | Average Compensation Actually Paid to Non-PEO NEOs | ||||||||
| 2023 | $1,283,723 | ($681,395 | ) | $323,142 | $925,470 | |||||||
| 2022 | $873,407 | ($417,458 | ) | $317,333 | $773,282 | |||||||
| 2021 | $444,634 | ($221,262 | ) | $63,068 | $286,440 | |||||||
| 2020 | $694,485 | ($236,925 | ) | $164,430 | $621,990 | |||||||
| 2019 | $674,037 | ($72,036 | ) | ($149,329 | ) | $452,672 |
(a)The grant date fair value of equity awards represents the total of the amounts reported in the "Stock Awards" and "Option Awards" columns in the Summary Compensation Table for the applicable fiscal year.
(b)The equity award adjustments for each applicable fiscal year include the addition (or subtraction, as applicable) are as discussed above in footnote (6)(b), and there were no adjustments related to item (vi) in footnote (6)(b). The amounts deducted or added in calculating the equity award adjustments for our non-PEO NEOs are as follows:
| Year | (i) Average Year End Fair Value of Unvested Covered Year Equity Awards | (ii) Year over Year Average Change in Fair Value of Outstanding and Unvested Prior Year Equity Awards | (iii) Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | (iv) Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | (v) Average Awards Granted in Prior Fiscal Years that are Determined to Fail to Meet the Applicable Vesting Conditions During the Applicable Fiscal Year | Average Equity award adjustments | ||||||||||||
| 2023 | $280,876 | ($159,394 | ) | $341,250 | ($36,790 | ) | ($102,800 | ) | $323,142 | |||||||||
| 2022 | $267,099 | $16,754 | $23,036 | $14,944 | ($4,500 | ) | $317,333 | |||||||||||
| 2021 | $193,949 | $0 | $0 | $22,725 | ($153,606 | ) | $63,068 | |||||||||||
| 2020 | $177,840 | ($22,483 | ) | $0 | $20,552 | ($11,479 | ) | $164,430 | ||||||||||
| 2019 | $38,753 | ($66,536 | ) | $0 | ($11,911 | ) | ($109,635 | ) | ($149,329 | ) |
(9)Cumulative total shareholder return ("TSR") is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company's share price at the end and the beginning of the measurement period by the Company's share price at the beginning of the measurement period.
(10)Represents the weighted peer group TSR, weighted according to the respective companies' stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the group includes Block Inc; Fawry for Banking & Payment Technology; GHL Systems Bhd; Kakaopay Corp; Moneylion Inc.; Network International Holdings; Pagseguro Digital Ltd; PayPoint PLC and StoneCo Ltd.
(11)Group Adjusted EBITDA is the most significant performance measure used to link our company's performance to compensation paid to our PEO and non-PEO NEO's. Group Adjusted EBITDA is a non-GAAP measure and represents is calculated as earnings (net income attributable to Lesaka) before interest, tax, depreciation and amortization ("EBITDA"), adjusted for non-operational transactions (including loss on disposal of equity-accounted investments, gain related to fair value adjustments to currency options), (earnings) loss from equity-accounted investments, stock-based compensation charges, lease adjustments and once-off items. Lease adjustments reflect lease charges and once-off items represents non-recurring expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued.
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Tabular list of financial performance measures
We have adopted a cash incentive award plan for the current fiscal year which includes a number of financial and non-financial performance measures. We consider the following to be a list of our most important financial performance measures used to link compensation actually paid to our named executive officers for our fiscal 2023 company performance, as required by Item 402(v) of Regulation S-K, the following is a list of financial performance measures:
| Kola | Heilbron | Mali | |||
| Group Adjusted EBITDA | ||||||
| Group Adjusted EBITDA | Group Adjusted EBITDA | ||||
| Adjusted net loss before tax | ||||||
| Adjusted net loss before tax | Adjusted net loss before tax | ||||
| Merchant Segment Adjusted EBITDA | ||||||
| Merchant Segment Adjusted EBITDA | Consumer Segment Adjusted EBITDA | ||||
| Consumer Segment Adjusted EBITDA | ||||||
| ||||||
| Overall Merchant revenue | ||||||
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Description of Relationships Between Certain Information Presented
Item 402(v) of Regulation S-K requires that we provide the relationship between compensation actual paid to our PEOs and our Non-PEO NEOs and our net income and company-selected measure, namely Group Adjusted EBITDA, and our TSR. We have experienced a challenging operating environment in the four years leading up to fiscal 2023, and have executed a number of initiatives, dating back as early as late calendar 2021, to transform our company. These initiatives include putting together a new management team, rebranding as Lesaka, concluding the acquisition of Connect and integrating its operations into the broader group, and assessing our Consumer business and taking the necessary actions (branch and staff rationalization, re-negotiation of supplier arrangements, price adjustments to our product offering etc.). All of these actions have combined to reduce our net loss by $275.9 million over the last five years, from a $311.0 million net loss in fiscal 2019 to $35.1 million net loss in fiscal 2023, and improve our Group Adjusted EBITDA from a loss of ZAR 951.6 million in fiscal 2019 to a profit of ZAR 497.6 million in fiscal 2023.
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
As described above under “Compensation Discussion and Analysis”, we do not have employment, severance or change of control agreements with named executive officers, other than the service agreements with Mr. Oh. In addition, none of our outstanding equity awards include provisions for accelerated vesting upon a change in control of our company or termination of employment following such a change in control.
Under the terms of Mr. Oh’s servicetheir employment agreements, if he is removed from office as a director of KSNET or Net1 Korea without justifiable cause, he isour named executives are entitled to receivethree months written notice before any termination would take effect.
Our Amended and Restated 2022 Stock Incentive Plan ("2022 Plan") includes change-in-control provisions related to equity awards granted. If the amountsparties to any change-in-control transactions do not permit the assumption, continuation or substitution of base salaryawards under the 2022 Plan then the 2022 Plan and any awards granted under it shall terminate. In such case, except as may be otherwise provided in relevant stock award agreements, all options and stock appreciation rights with time-based vesting conditions or restrictions that are not vested and/or exercisable immediately prior to the bonus (if any) that wouldeffective time of the change-in-control shall become fully vested and exercisable as of the effective time of the change-in-Control. All other awards with time-based vesting, conditions or restrictions shall become fully vested and nonforfeitable as of the effective time of the change-in-control, and all awards with conditions and restrictions relating to the attainment of performance goals may become vested and nonforfeitable in connection with a change-in-Control in the Remuneration Committee's discretion or to the extent specified in the relevant award agreement(s).
In the event of such termination:
- we shall have
been duethe option (in our sole discretion) to make or provide for a payment, in cash or in kind, to the participants holding options andpayable to him if he was fully employed with usstock appreciation rights, in exchange for theremaindercancellation thereof, in an amount equal to the difference between (A) the sale price multiplied by the number of shares subject to outstanding options and stock appreciation rights (to the extent then exercisable at prices not in excess of thethen-current fiscal year. The term “justifiable cause” includes anysale price) and (B) the aggregate exercise price of all such outstanding options and stock appreciation rights (provided that, out of thefollowing circumstances,money stock options and stock appreciation rights shall be cancelled for no consideration); or - each grantee shall be permitted, within a specified period of time prior to the consummation of the change-in-control as
well as anydetermined by the Remuneration Committee, to exercise all outstanding options and stock appreciation rights (to the extent then exercisable) held by such participant.
Our company shall also have the option (in its sole discretion) to make or provide for a payment, in cash or in kind, to the grantees holding other circumstances permitted under applicable law:
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Assuming that Mr. Oh was removed from office as a director of KSNET or Net1 Korea without justifiable cause on the last day of fiscal 2017, i.e., June 30, 2017, Mr. Oh would have been entitled to receive a cash severanceawards in an amount equal to his achieved qualitativethe sale price multiplied by the number of vested shares under such awards. The treatment of awards or $89,026, forupon a change-in-control may vary among the fiscal year.
Mr. Oh is also entitled to a severance payment equal to 300% of his monthly base salary for each completed year of service at KSNETaward types and Net1 Korea. Using exchange rates applicable as of June 30, 2017, and nine years of completed service at KSNET and three years of completed service at Net1 Korea, Mr. Oh would be entitled to a severance payment of $801,888.
Except as described above with respect to Mr. Oh, there would be no compensation, other than that prescribed by local labor lawsparticipants in the casesole discretion of unfair dismissalthe Remuneration Committee. Unless otherwise determined by our Board (on the same basis or retrenchment, that would become payable underon different bases as the existing plans and arrangements if the employment ofRemuneration Committee shall specify), any repurchase rights or other rights of our named executive officers had terminatedcompany that relate to an award shall continue to apply to consideration, including cash, that has been substituted, assumed or amended for an award.
On the assumption that all restricted stock awards vested in a change-in-control transaction or our Remuneration Committee waived all vesting conditions (including performance conditions) regarding a change-in-control transaction closing, in either case, on June 30, 2017.
Other than as described under “Certain Relationships2023, using our June 30, 2023, closing price of $3.81 and Related Transactions—Retirementunvested restricted stock awards of Serge C.P. Belamant and Separation Arrangements,”1,062,353 shares, we do not have any ongoing obligation to provide post-termination benefitswould make a potential payment of $4.1 million to our named executive officers, after termination of employment.comprising $1.9 million, $0.5 million, $0.9 million and $0.8 million to Messrs. Meyer, Kola, Heilbron and Mali, respectively.
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CERTAIN RELATIONSHIPS AND RELATED PERSONS TRANSACTIONS Familial Relationships
Consulting Agreement with Mr. P.M. Belamant, our former Managing Director—ZAZOO Limited, isAli Mazanderani
On August 5, 2020, we entered into a Consulting Agreement with Mr. Mazanderani (the "Mazanderani Consulting Agreement") pursuant to which Mr. Mazanderani will, among other things, consult with the son of Mr. S.C.P. Belamant, our former ChairmanBoard and the Chief Executive Officer. See “Executive Compensation”Officer for information abouta period of two years on matters regarding our strategy. Mr. P.M. Belamant’s compensation.Mazanderani has extensive experience in global fintech businesses, including in several of our company's principal geographies and product lines. The Mazanderani Consulting Agreement expired under its terms on August 5, 2022.
Grant van Wyk, Chief Operating Officer—ZAZOO Limited, isPursuant to the son-in-lawterms of the Mazanderani Consulting Agreement, Mr. S.C.P. Belamant. Mr. van WykMazanderani received a $16,667 per month, or $200,000 per year (the "Consulting Fee"), which was basedpayable on a monthly basis in South Africa until August 2015,arrears, and was secondedeligible for a short-term incentive bonus of up to 100% of the Consulting Fee, subject to the UK from September 2015. All compensation for services performed by Mr. van Wyk in fiscal 2017achievement of certain pre-determined performance targets, and was denominated and paid in GBP and has been converted into USD at the average exchange rate for fiscal 2017. Mr. van Wyk received a salary and bonus of $132,271 and $16,052, respectively, during fiscal 2017. During fiscal 2017, Mr. van Wyk received $19,883 relatedgranted an option to the encashment of leave. In connection with his secondment to the UK, Mr. van Wyk received housing and school fee allowances which aggregated $128,201 and $28,034, respectively, during fiscal 2017. He also received tax equalization payments and payment of UK health insurance contributions of $42,348 and $4,450, respectively paid group life premiums on his behalf of $3,565. In August 2017, Mr. van Wyk’s employment was terminated by mutual consent.
Philippus Stefanus Meyer, Managing Director—Transact24, is onepurchase 150,000 shares of our executive officers. Mr. Meyer’s wife, Lam Hiu Kwan, is employed by Transact24 and controls a company that performs transaction processing services and Transact24 provides technical and administration servicescommon stock at an exercise price of $3.50 per share, pursuant to us. We have recorded revenue of approximately $4.2 million related to this relationship during fiscal 2017. As of June 30, 2017, $0.4 million is due to us related to the service provided by Transact24. Ms. Lam also received a salary of $168,000 and aour stock incentive plan. No performance bonus was paid during the year.
Familial Relationships
There are no familial relationships among any of $58,000 from Transact 24 during fiscal 2017. Transact24 also paid her Hong Kong Mandatory Provident Fund contributions and medical and travel insurance of $2,300 and $832, respectively.our directors or executive officers.
Policy Agreement with IFC Investors
Pursuant to the Policy Agreement, dated April 11, 2016 (the “Policy Agreement”"Policy Agreement"), between International Finance Corporation, IFC African, Latin American and Caribbean Fund, LP, IFC Financial Institutions Growth Fund, LP, and Africa Capitalization Fund, Ltd. (collectively, the “IFC Investors”"IFC Investors") and us, the IFC Investors are entitled to designate one nominee to our Board. The IFC Investors have advised us that the IFC Investors regard Mr. MockettHamid as the independent director nominated by the IFC Investors under the terms of the Policy Agreement. In addition, pursuant to the Policy Agreement, the IFC Investors have been granted certain rights, including the right to require us to repurchase any shares we have sold to them upon the occurrence of specified triggering events, which we refer to as a “put right.”"put right".
Events triggering the put right relate to (1) us being the subject of a governmental complaint alleging, a court judgment finding or an indictment alleging that we (a) engaged in specified corrupt, fraudulent, coercive, collusive or obstructive practices; (b) entered into transactions with targets of economic sanctions; or (c) failed to operate our business in compliance with anti-money laundering or anti-terrorism laws; or (2) we reject a bona fide offer to acquire all of our outstanding shares at a time when we have in place or implement a shareholder rights plan, or adopt a shareholder rights plan triggered by a beneficial ownership threshold of less than twenty percent. The put price per share will be the higher of the price per share paid to us by the IFC Investors and the volume-weighted average price per share prevailing for the 60 trading days preceding the triggering event, except that with respect to a put right triggered by rejection of a bona fide offer, the put price per share will be the highest price offered by the offeror.
Cooperation Agreement and Securities Purchase Agreement with VCP
Pursuant to a Cooperation Agreement, dated May 13, 2020, as amended on December 9, 2020, and March 22, 2022, (collectively the "Cooperation Agreement"), between VCP and us, VCP is entitled to designate one nominee to our Board. VCP has designated Mr. A.C. Ball as its nominee to our Board. In addition, pursuant to the Cooperation Agreement, VCP has agreed to refrain from acquiring more than 24.9% of our outstanding common stock or taking certain actions, including acting in concert with others, that could result in a change of control of our company. The restriction to acquire more than 24.9% of our common stock excludes any shares of our common stock acquired pursuant to the Securities Purchase Agreement (the "VCP Agreement") dated as of March 22, 2022. These restrictions remained in effect through the date of our 2022 annual meeting of shareholders and the Cooperation Agreement has expired.
On March 22, 2022, we entered into the "VCP Agreement" with VCP whereby VCP will procure that one or more funds under its management (the "Purchasing Funds") will subscribe for, and we will have the obligation to issue and sell to the Purchasing Funds, ZAR 350.0 million of our common stock if (i) an event of default occurs under certain debt agreements entered into with FirstRand Bank Limited acting through its Rand Merchant Bank division ("RMB") (including Facility G or Facility H), (ii) Lesaka SA fails to pay all outstanding amounts in respect of Facility H on the maturity date of such facility, or (iii) our market capitalization on the Nasdaq Global Select Market (based on the closing price on such exchange) falls and remains below the U.S. dollar equivalent of ZAR 2.6 billion on more than one day. The VCP Agreement contains customary representations and warranties from us and VCP and covenants from us and certain of our subsidiaries.
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On March 16, 2023, we entered into an amendment agreement (the "VCP Amendment Agreement") with VCP to amend the maturity date under the agreement with VCP to December 31, 2025, in order to align such date with the maturity date of certain of our debt agreements.
Additionally, we entered into a Step-In Rights Letter on March 22, 2022 with VCP and RMB, which provides RMB with step in rights to perform the obligations or enforce our rights under the VCP Agreement to the extent that we fail to do so and do not remedy such failure within two business days of notice of such failure.
Independent Director Agreements
We have entered into independent director agreementagreements with each of our independent directors, providing for, among other things, the terms of each director’sdirector's service, compensation and liability.
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Indemnification Agreements
We have entered into indemnification agreements with each of our directors. These agreements require us to indemnify them, to the fullest extent authorized or permitted by applicable law, including the Florida Business Corporation Act, for certain liabilities to which they may become subject as a result of their affiliation with us.
Retirement of Serge C.P. Belamant and Separation Arrangements
Mr. S.C.P. Belamant retired from his position as Chief Executive Officer and as a member of our Board, effective as of May 31, 2017. Mr. Kotzé succeeded Mr. S.C.P. Belamant as Chief Executive Officer, effective immediately upon Mr. S.C.P. Belamant’s retirement. Mr. Kotzé had been our Chief Financial Officer, Secretary and Treasurer since 2004. Mr. S.C.P. Belamant’s resignation was not due to any dispute or disagreement with us over any matter relating to our operations, policies or practices.
On May 24, 2017, we entered into a Separation and Release of Claims Agreement with Mr. S.C.P. Belamant (the “Separation Agreement”). The Separation Agreement provided for certain payments and other benefits to Mr. Mr. S.C.P. Belamant, including without limitation, the following: (a) a severance payment of US$1,000,000, representing compensation for 27 years of service with us, less applicable withholdings and deductions; (b) a payment of US$7,000,000, less applicable withholdings and deductions, as an additional amount in part for Mr. S.C.P. Belamant’s cooperative resignation; (c) accelerated vesting of 200,000 shares of restricted stock granted to Mr. S.C.P. Belamant in August 2016, (d) the repurchase from Mr. S.C.P. Belamant by us of his shares of our common stock pursuant to a stock repurchase agreement (as described below), and (e) the repurchase of 252,286 of Mr. S.C.P. Belamant’s in-the-money stock options at a price per option equal to (i) US$10.80 minus (B) the applicable exercise price per option. In addition, the Separation Agreement included a general release and waiver of claims by Mr. S.C.P. Belamant related to Mr. S.C.P. Belamant’s employment with us.
On May 24, 2017, as contemplated by the Separation Agreement, we entered into a Stock Repurchase Agreement with Mr. S.C.P. Belamant pursuant to which we agreed to repurchase from Mr. S.C.P. Belamant, at a price of US$10.80 per share, 1,017,465 shares of our common stock owned by Mr. S.C.P. Belamant within 10 days after the separation date. To effectuate the repurchase of the options pursuant to the Separation Agreement, the options were exercised by Mr. S.C.P. Belamant and the shares issued pursuant to such options were repurchased by us. The Remuneration Committee met on May 3, 2017, to discuss Mr. S.C.P. Belamant’s early retirement, and proposed a repurchase price of $10.80 per share, which was 6 cents lower than the closing price on May 2, 2017.
On May 24, 2017, as contemplated by the Separation Agreement, we entered into a Consulting Agreement with Mr. S.C.P. Belamant (the “Consulting Agreement”). Under the Consulting Agreement, Mr. S.C.P. Belamant would provide consulting services to us as an independent contractor as requested by us for a period of up to two years following his departure, subject to termination by us or Mr. S.C.P. Belamant with a minimum 90 day notice period. On July 31, 2017, our board of directors issued Mr. S.C.P. Belamant a 90-day written notice to terminate his two-year consulting agreement with us. We will not be making any termination payments to Mr. Belamant beyond the 90-day notice period. We paid Mr. S.C.P. Belamant US$50,000 per month plus any applicable value-added tax, prorated for a partial month, for such services.
Review, Approval or Ratification of Related Person Transactions
We review all relationships and transactions in which we and our directors and named executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. Mr. KotzéKola is primarily responsible for the development and implementation of processes and controls to obtain information from the directors and named executive officers with respect to related person transactions and for then determining, based on the facts and circumstances, whether we or a related person has a direct or indirect material interest in the transaction. As required under SEC rules, transactions that are determined to be directly or indirectly material to us or a related person are disclosed in our proxy statement. In addition, our Audit Committee reviews and approves or ratifies any related person transaction that is required to be disclosed. In the course of its review and approval or ratification of a disclosable related party transaction, our Audit Committee considers:
the nature of the related person's interest in the transaction;
the material terms of the transaction, including, without limitation, the amount and type of transaction;
the importance of the transaction to the related person;
the importance of the transaction to us;
whether the transaction would impair the judgment of a director or executive officer to act in our best interest; and
any other matters the Audit Committee deems appropriate.
Any member of the Audit Committee who is a related person with respect to a transaction under review may not participate in the deliberations or vote respecting approval or ratification of the transaction, provided, however, that such director may be counted in determining the presence of a quorum at a meeting of the Audit Committee that considers the transaction.
DELINQUENT SECTION 16(A) REPORTS
Section 16(a) of the Exchange Act requires our directors and certain officers, as well as persons who own more than 10 percent of our common stock, to file with the SEC initial reports of beneficial ownership on Form 3 and reports of subsequent changes in beneficial ownership on Form 4 or Form 5. Based solely on our review of these forms filed with the SEC, and certifications from our executive officers and directors that no other reports were required for such persons, we believe that all directors and officers and greater than 10 percent shareholders complied with the filing requirements applicable to them for the fiscal year ended June 30, 2023, in a timely manner, with the exception of a late Form 4 filed on February 28, 2023, for Mr. Mali in connection with sale of our shares of common stock on February 17, 2023, and late Form 4 filed jointly on May 23, 2023, by VCP and Messrs. Ball and Nkosi, in connection with a purchase of our shares of common stock on May 18, 2023.
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AUDIT AND NON-AUDIT FEES
The following table shows the fees that we paid or accrued for the audit and other services provided by Deloitte, our previous independent registered public accounting firm, for the fiscal years ended June 30, 20172023 and 2016.2022.
| 2017 | 2016 | |||||||||||
| $ ‘000 | $ ‘000 | 2023 $ '000 | 2022 $ '000 | |||||||||
| Audit Fees | 2,056 | 1,631 | 2,796 | 2,316 | ||||||||
| Audit-Related Fees | - | - | - | - | ||||||||
| Tax Fees | - | - | - | - | ||||||||
| All Other Fees | - | - | - | - | ||||||||
Audit Fees –- This category includes the audit of our annual consolidated financial statements on Form 10-K, review of financial statements included in our quarterly reports on Form 10-Q, the required audit of management’smanagement's assessment of the effectiveness of our internal control over financial reporting and the auditors’auditors' independent audit of internal control over financial reporting, and the services that an independent auditor would customarily provide in connection with subsidiary audits, statutory requirements, regulatory filings, and similar engagements for the fiscal year, such as comfort letters, attest services, consents, and assistance with review of documents filed with the SEC. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.
Audit-Related Fees –- This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.”"Audit Fees". There were no such fees paid in the fiscal years ended June 30, 20172023 or 2016.2022.
Tax Fees –- This category consists of professional services rendered by Deloitte for tax compliance and tax advice. The services for the fees disclosed under this category include tax return reviewreviews and technical tax advice. There were no such fees paid in the fiscal years ended June 30, 20172023 or 2016.2022.
All Other Fees –- This category consists of miscellaneous fees that are not otherwise included in the previous fourthree categories. There were no such fees paid in the fiscal years ended June 30, 20172023 or 2016.2022.
Pre-Approval of Audit and Non-Audit Services
Pursuant to our Audit Committee charter, our Audit Committee reviews and pre-approves both audit and non-audit services to be provided by our independent auditors. The authority to grant pre-approvals of non-audit services may be delegated to one or more designated members of the Audit Committee whose decisions will be presented to the full Audit Committee at its next regularly scheduled meeting. During fiscal years 20172023 and 2016,2022, all of the services provided by Deloitte with respect to fiscal years 20172023 and 20162022 were pre-approved by the Audit Committee.
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AUDIT COMMITTEE REPORT
The Audit Committee of the Board consists of fourat least three independent directors, as required by Nasdaq listing standards. The Audit Committee operates under a written charter adopted by the Board, andwhich is available on our website free of charge at www.net1.com.www.lesakatech.com. The Audit Committee is responsible for overseeing our financial reporting process on behalf of the Board. The members of the Audit Committee are Messrs. Seabrooke, Pein, EdwardsMses. Singh-Bushell, Gobodo, Naidoo and Mockett.Mr. Hamid. The Audit Committee selects, subject to shareholder ratification, our independent registered public accounting firm.
Management is responsible for our financial statements and the financial reporting process, including internal controls. The independent registered public accounting firm is responsible for performing an independent audit of our consolidated financial statements in accordance with auditing standards generally accepted in the United States and of our internal control over financial reporting and for issuing a report thereon. The Audit Committee’sCommittee's responsibility is to monitor and oversee these processes.
In this context, the Audit Committee has met and held discussions with management and Deloitte. Mr. KotzéKola represented to the Audit Committee that the consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States, and the Audit Committee reviewed and discussed the consolidated financial statements with Mr. KotzéKola and Deloitte. The Audit Committee discussed with Deloitte the matters required to be discussed by the Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU §380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.(the "PCAOB") and the SEC. These matters included a discussion of Deloitte’sDeloitte's judgments about the quality (not just the acceptability) of our accounting principles as applied to our financial reporting.
Deloitte also provided the Audit Committee with the written disclosures and letter required by the PCAOB regarding Deloitte’sDeloitte's communications with the Audit Committee concerning independence, and the Audit Committee discussed with Deloitte the firm’sfirm's independence.
Based upon the Audit Committee’sCommittee's discussion with management and Deloitte and the Audit Committee’sCommittee's review of the representations of management and the disclosures by Deloitte to the Audit Committee, the Audit Committee recommended to the Board that our audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended June 30, 2017,2023, for filing with the SEC.
| Audit Committee Ekta Singh-Bushell, Chairperson Nonkululeko N. Gobodo S. Venessa Naidoo Javed Hamid |
Audit CommitteeChristopher S. Seabrooke, ChairmanAlasdair J.K. PeinPaul EdwardsAlfred T. Mockett
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table presents, as of September 22, 2017,2023, information about beneficial ownership of our common stock by:
each person or group of affiliated persons who or which, to our knowledge, owns beneficially more than 5% of our outstanding shares of common stock;
each of our current directors and named executive officers; and
all of our current directors and executive officers as a group.
Beneficial ownership of shares is determined in accordance with SEC rules and generally includes any shares over which a person exercises sole or shared voting or investment power. The beneficial ownership percentages set forth below are based on 56,927,69661,516,860 shares of common stock outstanding as of September 22, 2017.2023. All shares of common stock, including that common stock underlying stock options that are presently exercisable or exercisable within 60 days after September 22, 20172023 (which we refer to as being currently exercisable) by each person are deemed to be outstanding and beneficially owned by that person for the purpose of computing the ownership percentage of that person, but are not considered outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, to our knowledge, each person listed in the table below has sole voting and investment power with respect to the shares shown as beneficially owned by such person, except to the extent applicable law gives spouses shared authority.
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Except as otherwise noted, each shareholder’sshareholder's address is c/o Net 1 UEPSLesaka Technologies, Inc., President Place, 4th Floor, Corner of Jan Smuts Avenue and Bolton Road, Rosebank, Johannesburg, South Africa.
| Shares of Common Stock | ||||||
| Name | Beneficially Owned | |||||
| Number | % | |||||
| Paul Edwards(1) | 19,822 | * | ||||
| Herman G. Kotzé(2) | 890,974 | 1.55% | ||||
| Alfred T. Mockett (3) | 11,549 | * | ||||
| Phil-Hyun Oh (4) | 53,928 | * | ||||
| Alasdair J.K. Pein(5) | 86,940 | * | ||||
| Christopher S. Seabrooke(6) | 18,124 | * | ||||
| Nitin Soma(7) | 210,304 | * | ||||
| IFC Investors(8) | 9,984,311 | 17.54% | ||||
| Allan Gray Proprietary Limited(9) | 8,974,284 | 15.76% | ||||
| International Value Advisers, LLC(10) | 7,017,754 | 12.33% | ||||
| Directors and Executive Officers as a group(11) | 1,830,464 | 3.18% | ||||
| Name | Shares of Common Stock Beneficially Owned | |||||||
| Number | % | |||||||
| Antony C. Ball | - | - | ||||||
| Nonkululeko N. Gobodo | - | - | ||||||
| Javed Hamid | - | - | ||||||
| Steven J. Heilbron(1) | 525,000 | * | ||||||
| Naeem Kola(2) | 257,713 | * | ||||||
| Lincoln C. Mali(3) | 286,972 | * | ||||||
| Ali Mazanderani | - | - | ||||||
| Chris Meyer(4) | 787,205 | 1.28% | ||||||
| S. Venessa Naidoo | - | |||||||
| Monde Nkosi | - | - | ||||||
| Kuben Pillay | - | - | ||||||
| Ekta Singh-Bushell | 7,000 | * | ||||||
| Value Capital Partners (Pty) Ltd (5) | 14,670,700 | 23.85% | ||||||
| IFC Investors and Related Entities(6) | 7,366,866 | 11.98% | ||||||
| The Goldman Sachs Group, Inc.(7) | 4,997,545 | 8.12% | ||||||
| Morgan Stanley(8) | 5,187,577 | 8.43% | ||||||
| Directors and Executive Officers as a Group(9) | 1,863,890 | 3.03% | ||||||
_____________________
*Less than one percent
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33(1)Comprises (i) 300,000 shares of common stock; and (ii) 225,000 shares of restricted stock, the vesting of which is subject to the satisfaction of time-based vesting conditions.
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(1)Comprises (i) 63,131 shares of common stock; and (ii) 194,582 shares of restricted stock, the vesting of which is subject to the satisfaction of certain time-based vesting conditions. (2)Comprises (i) 79,934 shares of common stock; and (ii) 207,038 shares of restricted stock, the vesting of which is subject to the satisfaction of certain financial performance and other conditions. (3)Comprises (i) 178,194 shares of common stock; (ii) 183,760 shares of common stock held by a trust, settled by a relative of Mr. Meyer and of which he is a beneficiary, and (iii) 425,251 shares of restricted stock, the vesting of which is subject to the satisfaction of certain financial performance and other conditions. (5)According to Amendment No. 6 to Schedule 13D/A filed by VCP with the SEC on November 15, 2022, VCP has sole voting and dispositive power over these securities. VCP's business address is 173 Oxford Road, 8th Floor, Rosebank, Gauteng, 2196, South Africa. Antony C. Ball is the non-executive chairman and Monde Nkosi is an executive director of VCP. (6)According to Amendment No. 2 to Schedule 13D/A filed by the IFC Investors and related entities with the SEC on August 19, 2022: (a) International Finance Corporation ("IFC") beneficially owns an aggregate of 2,267,239 common shares as to which it has sole voting and dispositive power, (b) IFC African, Latin American and Caribbean Fund, LP ("ALAC") beneficially owns an aggregate of 2,781,615 common shares as to which it has shared voting and dispositive power, (c) IFC African, Latin American and Caribbean Fund (GP) LLC ("ALAC GP") beneficially owns an aggregate of 2,781,615 common shares as to which it has shared voting and dispositive power, (d) IFC Financial Institutions Growth Fund, LP ("FIG") beneficially owns an aggregate of 2,318,012 common shares as to which it has shared voting and dispositive power, and (e) IFC FIG Fund (GP), LLP ("FIG GP") beneficially owns an aggregate of 2,318,012 common shares as to which it has shared voting and dispositive power. Each of ALAC, a United Kingdom limited partnership, and FIG, a United Kingdom limited partnership, is primarily engaged in the business of investing in securities. ALAC GP, a Delaware limited liability company, is primarily engaged in the business of serving as the general partner of ALAC. FIG GP, a United Kingdom limited liability partnership, is primarily engaged in the business of serving as the general partner of FIG. Each of ALAC and FIG are funds managed by IFC Asset Management Company LLC, a wholly-owned subsidiary of IFC, that invests third party capital in conjunction with IFC investments. The business address of the aforementioned entities is 2121 Pennsylvania Avenue, Washington, D.C. 20433. (7)According to Amendment No 1. to Schedule 13G filed by The Goldman Sachs Group, Inc. ("Goldman Sachs") with the SEC on February 8, 2023, Goldman Sachs has shared voting and dispositive power over these securities. Goldman Sachs's business address is 200 West Street, New York, NY 10282. (8)According to Amendment No. 1 to Schedule 13G filed by Morgan Stanley with the SEC on February 10, 2023, Morgan Stanley has shared voting and dispositive power over these securities. Morgan Stanley's business address is 1585 Broadway, New York, NY 10036. (9)Represents shares beneficially owned by |
ADDITIONAL INFORMATION
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires that our executive officers and directors, and persons who own more than 10% of a registered class of our equity securities, file reports of ownership and changes in ownership with the SEC and provide us with copies of such reports. We have reviewed such reports received by us and written representations from our directors and executive officers. Based solely on such review and representations, we believe that all filings requirements applicableofficers as a group. Includes 1,051,871 shares of restricted stock, the vesting of which is subject to our executive officers, directors and more than 10% shareholders were complied with during fiscal year 2017.certain conditions discussed above.
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ADDITIONAL INFORMATION
Annual Report on Form 10-K
A copy of our annual report on Form 10-K (without exhibits) for the fiscal year ended June 30, 2017,2023, is being distributed along with this proxy statement. We refer you to such report for financial and other information about us, but such report is not incorporated in this proxy statement and is not deemed to be a part of the proxy solicitation material. It is also available on our website (www.net1.com)(www.lesakatech.com). In addition, theour annual report (with exhibits) is available at the SEC’sSEC's website (www.sec.gov).
Shareholder Proposals and Director Nominations for the 20182024 Annual Meeting
Qualified shareholders who wish to have proposals presented at the 20182024 annual meeting of shareholders must deliver them to us by June 2, 2018,4, 2024, in order to be considered for inclusion in next year’syear's proxy statement and proxy pursuant to Rule 14a-8 under the Exchange Act. Shareholders who intend to present an item of business for our 20182024 annual meeting of shareholders (other than a proposal presented for inclusion in next year’syear's proxy statement and proxy pursuant to Rule 14a-8) must provide notice of such business to us by June 2, 2018,4, 2024, as set forth more fully in SectionsSection 2.08 and 4.16 of our Amended and Restated By-Laws. Shareholders who wish to nominate one or more persons for election as directors must provide notice of such nominations to us by June 2, 2018,4, 2024, as set forth more fully in Sections 2.08 andSection 4.16 of our Amended and Restated By-Laws. All proposals and nominations must be delivered to us at our principal executive offices at POP.O. Box 2424, Parklands 2121, South Africa.
Householding of Proxy Materials
We have adopted a procedure approved by the SEC called “householding.”"householding". Under this procedure, multiple shareholders who share the same last name and address will receive only one copy of the annual proxy materials, unless they notify us that they wish to continue receiving multiple copies. We have undertaken householding to reduce our printing costs and postage fees.
If you wish to opt-outopt out of householding and receive multiple copies of the proxy materials at the same address, you may do so at any time prior to 30 days before the mailing of proxy materials, which typically are mailed at the end ofin early October of each year, by notifying us in writing at: Net 1 UEPSLesaka Technologies, Inc., POP.O. Box 2424, Parklands 2121, South Africa, Attention: Net 1 UEPSLesaka Technologies, Inc. Corporate Secretary. You also may request additional copies of the proxy materials by notifying us in writing at the same address.
If you share an address with another shareholder and currently are receiving multiple copies of the proxy materials, you may request householding by notifying us at the above-referenced address.
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Other Matters
The Board knows of no other matters that will be presented for consideration at the annual meeting. Return of a valid proxy, however, confers on the designated proxy holders the discretionary authority to vote the shares in accordance with their best judgment on such other business, if any, that may properly come before the meeting or any adjournment or postponement thereof.
By Order of the Board of Directors,
 Kuben Pillay Chairman | |
| September 29, 2023 | |
September 29, 2017
THE BOARD HOPES THAT YOU WILL ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE PROMPTLY COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY.
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