Nomination criteria and procedure of management team

The Leadership Development and Compensation Committee (LDCC) shall nominate the suitable person(s) to be appointed as the Chief Executive Officer and other senior management positions which report directly to the Chief Executive Officer, including the preparation of a succession plan relating thereto. In this regard, the LDCC shall seek to recruit the qualified person(s) either internally or externally with support from professional consultants if required.

In addition, the Company shall prepare the succession plan of the high level executives (AVP up) by identifying the suitable persons to hold such positions, and shall utilize the human resource development and management system to prepare the subordinates for succession.

Remuneration structure

The compensation provides to CEO and Executives, as approved by the Board, consists of the following components:

Fixed compensation and benefits

Base Salary
The level of base compensation reflects each associate’s key responsibilities, job characteristics, experience and skill sets. It is paid in cash, monthly. Base compensation is reviewed annually, and any increase reflects merit based on performance, as well as market movements.

The primary purpose of benefits is to establish a level of security for employees and their dependents with respect to age, health, disability and death. The provident fund, insurance plans, and other welfare provisions are in line with market practices and legislative requirements.

Performance-related variable compensation

Performance Bonus
Provides a variable level of remuneration dependent on short-term performance against the annual plan, as well as relevant market remuneration benchmarks. The performance bonus is tied to annual Key Performance Indicator (KPI) and weights the various scorecard measures in order to determine overall company and individual performance evaluations and bonus awards.

Value-Sharing Cash
Value-Sharing Cash drives fundamental performance and aligns the interests of shareholders and executives based on economic profit. Part of the award is paid in cash provided that is positive in the current year. The remaining balance will be carried forward into cumulative bonus bank and at risk as it is subject to performance-related clawback and could be reduced as negative in the event of underperformance in the years.

For example, an Economic Value Bonus (EV) is one of the incentive awards under value-sharing cash scheme to motivate and compensate the executive (Assistant Vice President :AVP up) of the Company and its subsidiaries in order to improve their long-term performance and the Company’s competitiveness. Under the EV scheme, the clawback provision stated that a positive performance will be added to individual EV bank, but negative one will be deducted from such a EV bank.

Value-Sharing Equity
Value-Sharing Equity focuses on a long-term incentive to reinforce the delivery of sustainable growth and increase shareholder value by fostering an ownership culture and retaining key talent. In order to retain valuable executives and to show gratitude for their devotion at work which contribute greatly to growth and prosperity of the company, the company considers the allocation of the warrant to executives who possess high level of expertise and play a significant role in strengthening future business success. This allocation of warrant will contribute more benefit to the organization through sustainable leadership.

Success metrics

The corporate balanced scorecard (BSC) is used to measure the CEO and executives’ performance and determine the annual paid in term of performance bonus . It is a strategic tool to measure and monitor progress towards strategic targets. The corporate BSC comprising of financial and non-financial metrics as follows:

Besides of the success corporate BSC, The Leadership Development and Compensation Committee also incorporate the following key elements:

Shareholder alignment

  • Appropriate performance metrics are selected for annual and long-term incentive plans that will support business strategies and enhance value for shareholder.
  • Appropriate goals are set for threshold, target and stretch levels of performance.
  • A sound compensation structure is established to ensure affordability.

Competitive compensation

  • Compensation benchmarking helps the Company attract and retain highly experienced and talented individuals.
  • A significant proportion of remuneration is linked to performance, both on an annual and long-term basis.