CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2021 CORPORATE GOVERNANCE 44 45 Based on the Remuneration Framework, the remuneration packages for the EDs and KMP comprise a fixed component (which includes a 13th month Annual Wage Supplement ) and a var iable component (which currently comprises short-term incentives in the form of variable bonuses) and, where applicable, fixed allowances and benefits-in-kind determined by the Company’s Human Resource pol icies which apply to al l employees. When determining the fixed and variable components for a KMP, the KMP’s individual performance is taken into consideration and remuneration recommendations are reviewed in the light of any guidance from the National Wages Counci l , competitive market practices and information gathered from market surveys conducted by the Company’s Human Resource department with input from external remuneration consultants. This is further reviewed along with the Group’s performance, taking into consideration specific key performance indicators (involving financial and nonfinancial indicators) tracked over time using the Company’s balanced scorecard system that sets out the targets to be achieved by the Company based on its CORPORATE GOVERNANCE short and long-term objectives, which are cascaded down to the var ious business units. The Company exercises its discretion and independent judgement in ensuring that the amount and mix of compensation are aligned with the interests of shareholders and promote the long-term success of the Company. The overall level of remuneration is not considered to be at a level which is likely to promote behaviour contrary to the Group’s risk profile. The Company cur rent l y does not discourage Directors from holding shares in the Company but note that there is no requirement under the Company’s Constitution for Directors to hold shares i n order to be qua l i f i ed to act as a Director. When reviewing the structure and level of Directors’ fees, which comprise base director’s fee and additional fees for services rendered on Committees and fee for the Lead ID, the RC takes into consideration the Directors’ respective roles and responsibilities in the Board and Committees and the changes in the business, corporate governance practices and regulatory rules. The RC also compares the Company’s fee structure against industry practices annual ly. Other factors taken into consideration in the fee review include the frequency of Board and Committee meetings, corporate performance for the financial year under review as well as the corporate and economic outlook in the new f inanc ial year, and the interval since the last fee review. The RC is mindful that the remuneration for IDs should not be excessive so as to compromise or reasonably be perceived to compromise their independence. No Director is involved in deciding his or her own remuneration. Each of the Directors receives a base Director’s fee. The Lead ID also receives an additional fee to reflect his expanded responsibility. Directors who serve on the various Committees also receive addi t ional fees in respect of each Committee that they serve on, with the chairmen of the Committees receiving a higher fee in respect of their service as chairmen of the respective Committees. Attendance fee is payable for attendance in person or via teleconference or video conference at each meeting of the Board, IDs or Committee in consultation w i t h t he RC and t he r e s pe c t i ve Committee chairmen. The structure of the fees payable to Directors of the Company for FY 2021 is as follows: Appointment Per annum Board of Directors – Base fee $70,000 Audit & Risk Committee – ARC Chairman’s fee $90,000 – ARC Member’s fee $70,000 Nominating Committee – NC Chairman’s fee $22,000 – NC Member’s fee $15,000 Remuneration Committee – RC Chairman’s fee $22,000 – RC Member’s fee $15,000 Appointment Per annum Board Sustainability Committee – BSC Chairman’s fee $8,000 – BSC Member’s fee $5,000 Lead Independent Director’s fee $15,000 Attendance fee Per meeting $5,000* * Payable In consultation with the RC and the respective Committee chairmen. Principle 8: Disclosure of Remuneration Disclosure of Remuneration (Provisions 8.1(a) and 8.3) The compensation packages for employees including the EDs and the KMP, based on the Company’s Remuneration Framework, also take into account amongst other factors, the individual’s performance, the performance of the Group and industry practices. During the year, there were no termination, retirement or post-employment benefits granted to any Director or KMP. Directors’ and Group CEO’s remuneration for FY 2021, including a breakdown in percentage terms of the components of the remuneration, is set out below: Fixed Salary* Variable Bonuses* Board/ Committee Fees** Other Benefits Total % % % % Executive Directors Kwek Leng Beng^ 46 45 5 4 2,802,344 Sherman Kwek Eik Tse^ 45 45 7 3 1,723,932 Non-executive Directors Lim Yin Nee Jenny(1) – – 100 – 121,441 Philip Yeo Liat Kok – – 100 – 142,000 Tan Poay Seng(2) – – 100 – 39,658 Ong Lian Jin Colin – – 100 – 144,877 Daniel Marie Ghislain Desbaillets – – 100 – 124,945 Chong Yoon Chou – – 100 – 224,986 Chan Swee Liang Carolina – – 100 – 191,263 Lee Jee Cheng Philip(3) – – 100 – 281,904 Notes: * The fixed salary (inclusive of Annual Wage Supplement) and variable bonuses are inclusive of employer’s central provident fund contributions. ** These fees comprise Board and Committee fees as well as meeting attendance fees for FY 2021, which are subject to approval by shareholders as a lump sum at the 2022 AGM. ^ Remuneration of these Directors includes remuneration paid or payable by subsidiaries of the Company. (1) Ms Lim Yin Nee Jenny resigned as a Director of the Company on 3 May 2021 and the Board and Committee fees payable to her are pro-rated for FY 2021. (2) Mr Tan Poay Seng retired as a Director of the Company on 30 April 2021 and the Board and Committee fees payable to him are pro-rated for FY 2021. (3) Mr Lee Jee Cheng Philip was appointed as a Director of the Company with effect from 4 January 2021 and the Board and Committee fees payable to him are pro-rated for FY 2021. Remuneration of Key Management Personnel (KMP) (not being a Director or CEO) (Provisions 8.1(b) and 8.3) The aggregate remuneration paid to the KMP of the Company in respect of FY 2021, excluding the Directors and the Group CEO (whose remuneration have been disclosed in the Directors’ and Group CEO’s remuneration table above), is $3,969,913 which amount included directors’ fees paid or payable by subsidiaries of the Group. The Company maintains its view that it is not in its interest to disclose the remunerat ion of each of i ts KMP, excluding the Group CEO, whether in bands of $250,000 or to the nearest thousand dollars. Having considered the highly competitive human resource environment for personnel with the requisite knowledge, expertise and experience in the Company’s business activities, such disclosure of specific remuneration information may give rise to recruitment and talent retention issues. There would be negative impact to the Company if members of the experienced and qualified senior management team are poached, which may affect the ability to both nurture a sustainable talent pool and ensure the smooth continuity in leadership critical for the achievement of the strategic objectives of the Company. The Company believes that shareholders’ interest will not be prejudiced as a result of such nondisclosure of the remuneration for each of the Company’s KMP, excluding the Group CEO, and with the Company’s disclosure on the aggregate remuneration of the KMP, shareholders are provided an insight into the level of remuneration paid to the KMP.
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