MTN : FY 21 Remuneration Report

MTN Group Limited

Remuneration Report for the year ended 31 December 2021

Leading digital solutions for Africa's progress

Remuneration report

Contents

MTN stakeholders

This report has been prepared for our shareholders, employees, customers, partners and suppliers and the broader public.

Part I: Background

84 The year in review

86 Shareholder engagement and voting results

88 Focus areas and closing remarks

Part II: Remuneration policy

89 Our remuneration philosophy and principles

90 Overview of Total Reward elements

91 Detailed breakdown of Total Reward elements

92 Key changes to our remuneration framework

93 Approach to variable remuneration - short-term incentives

96 Approach to variable remuneration - long-term incentives

100 Executive pay mix and potential remuneration outcome scenarios

101 Shareholding requirements, malus and clawback and service contracts

103 Non-executive director policy and fee determination

Part III: Implementation report

106 Summary of key performance and leadership changes

107 Guaranteed pay outcomes

108 STI outcomes

108 LTI outcomes

110 Single figure remuneration summary

110 Remuneration outcomes - Group President and CEO

112 Remuneration paid to executive directors, prescribed officers, regional VPs and select Exco members

114 Share allocations for executive directors, prescribed officers, regional VPs and select Exco members

118 Remuneration paid to non-executive directors

About this report

Remuneration Report approval

The Board has considered the integrity of this report and has concluded that it adequately provides material disclosures of the MTN Group's remuneration policy and implementation thereof. This report was approved by the Board on 25 April 2022.

Structure of the report

To improve the understanding of remuneration matters, we have amended the structure and content of the report to enhance the clarity of policies. The report is structured in three parts in line with the guidance of the King IV Report on Corporate Governance™ for South Africa, 2016 (King IV).

The Remuneration Committee at a glance

The Group Remuneration and Human Resources Committee (Remco, or 'the committee') has been mandated by the Board to independently oversee and approve the remuneration policies and human resource approach for MTN to ensure these are fair, consistent, compliant and provide an objective, independent and constructive view of the Company's plans and decisions. The committee is responsible for evaluating and recommending to the Board critical strategic remuneration decisions.

In ensuring fair and responsible remuneration by the Group, the committee was comprised of six independent non-executive director members until 31 May 2021 and five independent non-executive directors from June 2021. The collective skills and experience profile of members includes telecommunications, finance, managing businesses in Africa and the Middle East, human capital, remuneration and risk management.

Chairman Khotso Mokhele

Part I: Background

Dear stakeholders

On behalf of the Board, I am pleased to present our Remuneration Report for 2021.

Introduction

As MTN works to deliver on its strategic intent of leading digital solutions for Africa's progress, our 'Live Inspired' employee value proposition remains key.

In line with the evolution of our business and our Ambition 2025 strategy, MTN introduced a refreshed organisation-wide approach, that involved a shift away from conventional ways of working into the new normal. This meant repositioning and attracting new skills and adopting a more agile, decentralised and empowering culture. Recognising that employees value choice and flexibility, we entrenched smart-working principles such as Anywhere, Anytime flexibility and balanced work-life. This will continue to be a key component of our overall employee value proposition.

To future-proof MTN and capitalise on our move towards a digital-adopter mindset and flexi-workforce, we are shifting our thinking from traditional reward to creative reward employee sustainable engagement approaches. This will ensure that our reward offerings, practices and policies evolve, remain relevant and stay true to the business requirements.

Business performance

We continue to optimise our portfolio to deliver on our strategic intent of leading digital solutions for Africa's progress.

At the end of 2021, we had 272 million subscribers across our 19 markets.

The return to shareholders, measured as the 30-day weighted total shareholder return (TSR), which includes both share appreciation and declared dividends, was 155% in 2021. This was a turnaround from 2020 (-19.9%) and materially up from 2019 (7.2%). This places MTN as the top performing company by TSR in the MSCI EM Communication Services Index, driven by the sharp increase in the share price over the year. This stands testament to our efforts to create shared value.

The committee continues to make every effort to act in accordance with the interest and benefits of shareholders to improve shareholder alignment.

Performance, reward and culture

We continued our drive of enabling a high performance and rewarding culture at work. Our engagements with employees through various platforms on culture and reward matters, transformed many of our human capital metrics. Multiple interventions beyond the traditional performance management approach were implemented to ensure that each MTNer is driven by purpose and is aligned with the Group's Ambition 2025.

Throughout the year, we encouraged employees to strive for team collaboration and to be driven by a larger purpose and contribute to the organisation's success in the long run.

Here are a few highlights of our key human capital metrics:

Gender diversity

Our journey towards a deliberate diversity and inclusion approach and plan has been central to MTN's people agenda. Highlights of our commitments in 2021 include:

• • Workforce gender equality by 2030.

• • Gender pay parity as a measure to enhance diversity, equality and inclusion.

• • Deliberate gender representation in our strategic programmes: at least 30% women representation in business transformations, upskilling programmes and specialised initiatives that form part of Ambition 2025.

We are also committed to improving the representation of differently abled communities, with our long and short-term targets linked to strategy and performance.

Remuneration Committee composition

The committee had four scheduled meetings and one workshop on succession planning. The committee is constituted by the following members:

Dr Khotso Mokhele

BSc (Agriculture), MSc (Food Science), PhD (Microbiology) and a number of honorary doctorates from various institutions

Appointed effectively from 1 July 2018 Attended all four meetings and one workshop

Bajabulile Swazi Tshabalala

Masters in Business Administration, Oxford Fintech Programme

Appointed effectively from 1 July 2019 Attended two meetings and one workshop

Mcebisi Hubert Jonas

Bachelor of Arts in History and Sociology, Higher Diploma in Education

Appointed effectively from 1 July 2019 Attended four meetings and one workshop

Vincent Rague

MBA, BA; Hons - Econ/Statistics, Executive development programmes

Appointed effectively from 1 July 2019

Attended four meetings, did not attended workshop

Nkululeko Leonard Sowazi

Masters Degree

Appointed effectively from 1 November 2016 Attended four meetings and one workshop

Azmi Mikati (he was a member until 28 May 2021)

B Engineering

Appointed effectively from 18 July 2016

Attended one meeting only

Mandate

The committee oversees the formulation of a remuneration philosophy and human resources approach, ensuring that MTN remunerates fairly and transparently. It also ensures that MTN employs and retains the best human capital for its business needs and maximises the potential of its employees.

Focus areas

MTN's remuneration policies aim to ensure that the Company has the right reward levers to remain relevant, are aligned to recommendations of King IV and best practice and that benchmarks are appropriately set to maintain market competitiveness and alignment to corporate goals.

We focus on ensuring that MTN's remuneration strategies and policies are designed to attract, motivate and retain quality employees, senior management and directors committed to achieving the overall goals of the Company.

Key features of 2021

In 2021, the committee reviewed and approved the following key remuneration decisions and policy developments:

• • 2021 Remuneration Report enhancements.

• • Targeted remuneration policy elements and changes.

• • Group annual performance bonus policy and changes.

• • Group performance management framework changes.

• • Annual Group share allocations under the employee share ownership plan (ESOP) and performance share plan (PSP) scheme, including establishment of the ESOP and PSP scheme for MTN Nigeria and MTN Ghana.

• • Salary increases for executive directors, general executives, non-executive management and non-management employees.

• • Annual target setting, performance scorecard outcomes and pay-outs for short-term incentives (STIs) and long-term incentives (LTIs).

• • Benchmarking process and proposed annual fees for non-executive directors.

• • Review and refinement of malus and clawback provisions and minimum shareholding requirements.

• • Review of succession planning for executive management and closing of gender pay gap.

• • Group 'anywhere anytime flexibility work policy'.

• • Environmental, Social and Governance (ESG) performance conditions.

• • Repositioning of our employee value proposition (EVP).

• • Approval of a COVID-19 vaccine policy.

Outcomes of remuneration review

Our 2021 remuneration outcomes are summarised below:

Annual fixed remuneration review

• • For 2021 pay reviews, we approved a 2.38% increase for executive management. For non-executive management, an average of 2.42% was approved and for non-management employees an average of 3.66% was approved. Expatriate employees were allotted a 1% increase. An increase towards the market median, capped at 2%, was awarded to NED fees.

Short-term incentives

• • The overall actual weighted company performance (CP), comprising financial and non-financial measures was 19% above budget.

• • The actual average of business unit or team performances across financial and non-financial measures was marginally above 100%.

STI outcomes (%)

Long-term incentives

• • Our performance shares allocated in 2018 under the PSP vested in December 2021 with an overall actual achievement of 100% of the three-year target for all participating employees.

These remuneration outcomes were aligned to our remuneration philosophy and cognisant of the expectations of our many stakeholders.

Shareholder engagement and voting results

MTN's 2020 Remuneration Report, along with other statutory reports, were released on 23 April 2021. At the AGM on 28 May 2021, we received an 86.00% vote in favour of the remuneration policy and a 60.80% vote in favour of the Implementation Report. The results with respect to the policy represent a significant improvement year-on-year (YoY) and the Company continues to strive to have a policy and framework that is both relevant and competitive in the market for the attraction of the diverse talent needs of MTN.

As the committee endeavours to act in the interests of shareholders, it notes that there is still room for improvement in shareholder support for our remuneration policy and in particular the implementation outcomes. We are committed to ongoing engagements with shareholders and took heed of the shareholder comments, inputs and feedback received during the 2021 AGM, as well as from other investor engagements in the year.

As we did not receive the requisite 75% approval of the 2020 implementation report, we engaged openly with our shareholders on their concerns. In addition, we invited dissenting shareholders (through a SENS announcement) to submit concerns and recommendations in writing. We would like to formally thank shareholders for the constructive engagements and feedback.

Shareholder roadshows took place in 2021 and were used to provide an update on remuneration changes in response to shareholders feedback. The policy and the implementation report will be presented for separate non-binding votes at our AGM on 25 May 2022. The resolutions are set out in the 2022 Notice of the AGM.

Remuneration Report (%)Implementation Report (%)

Shareholder concerns

In the table below we document Remco's official response to each concern raised. All responses were based on the premise of enhancing our remuneration policy and implementation thereof, as required.

Shareholder concerns/comments

Deferral incentivesNED fees paid for doing special projectsConsideration of the adoption of deferred incentives in light of annual remuneration.

The discretion to remunerate NEDs for providing additional services was viewed unfavourably by shareholders especially where there is no definitive annual cap on the maximum fees. This practice was viewed potentially to raise issues of conflict of interest.

Implementation

Shareholder concerns/comments

Disclosure of executive team performance KPIs

Remuneration policy

Committee response

We investigated the relevance and prevalence of deferrals among other companies. The committee resolved not to adopt a deferral system as existing LTI schemes sufficiently addressed this.

Furthermore, our pay mix for executives has a significant portion of total pay allocated to LTIs ensuring that there is an appropriate balance between short and long-term reward and associated performance. We will continue to monitor its prevalence.

As a principle, MTN has not paid any fees for any special projects. This is discouraged and any reference has been removed from the fee structure.

Committee response

Team performance KPIs of executives should be disclosed in detail as they impact the incentives paid.

Disclosure of the LTI scheme performance targets

Trigger events for malus and clawback

There is insufficient prospective (ex-ante) disclosure of LTI targets to assist shareholders in assessing the reasonability of variable remuneration outcomes.

We believe that providing the actual share award targets ex-ante/upfront gives away strategic long-term insights. We however disclose awards made and the metrics that are tracked in determining the outcomes of these awards to the extent that such disclosures do not divulge any sensitive non-public information about the Company. Refer to page 109 of the implementation report.

Trigger events that give rise to malus and clawback must be disclosed.

Disclosure of executive and CP outcomes is provided in the implementation report, highlighting the link between performance and reward. Refer to page 108 of the implementation report.

The applicable malus and clawback policy provisions have been disclosed on page 101 of this report.