Code of Best Practice on Corporate Governance
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Bank’s Adherence |
| B -Director’s Remuneration |
| B.1 - Remuneration Procedure |
Policy for Directors’ Remuneration
(Principle B.1 - Companies should establish a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors. No Director should be involved in deciding his or her own remuneration) |
The Human Resource & Remuneration Committee reviews the Bank’s human resources and remuneration policies and oversees the implementation of these policies. Remuneration levels are designed to attract, retain and motivate persons who contribute to the achievement of corporate objectives. The Chairman’s and other Directors’ remuneration are based on a certain percentage of the CEO’s remuneration. |
| (Principle B.1.1 - To avoid potential conflicts of interest, Boards of Directors should set up Remuneration Committees of independent Non-Executive Directors to make recommendations to the Board, within agreed terms of reference, on the Company’s framework of executive remuneration and its cost; and to determine on their behalf specific remuneration packages for each of the Executive Directors, including pension rights and any compensation payments) |
The Human Resource & Remuneration Committee, consists of the Executive Director and four Non-Executive Directors on the Board. These members are nominated by the Board of Directors of the Bank. The Committee is headed by the Non-Executive Chairman of the Bank. The Committee sets policies on remuneration, perquisites and allowances based on industry and market surveys.
The Bank is in the process of regularising the composition of this Committee to fall in line with the requirement of the Code. |
| (Principle B.1.2 - Remuneration Committees should consist exclusively of Non-Executive Directors who are independent of management and free from any business or other relationship which could materially interfere with the exercise of their independent judgement) |
| (Principle B.1.3 - The members of the Remuneration Committee should be listed each year in the Board’s remuneration report to shareholders) |
Complete list of the members of the Human Resource & Remuneration Committee.
The Report of the Human Resource and Remuneration Committee. |
| (Principle B.1.4 - The board as a whole, or where required by the Articles of Association, the shareholders should determine the remuneration of the Non-Executive Directors, including members of the Remuneration Committee, within the limits set in the Articles of Association. Where permitted by the Articles, the Board may however delegate this responsibility to a small sub-committee, which might include the Chief Executive Officer) |
The remuneration of the Non-Executive Directors are determined by the Board of Directors of the Bank, based on the CEO’s recommendation in accordance with the international practices and the recommendations made by the Human Resource & Remuneration Committee. There are no limits set by the Articles of Association of the remuneration of Non-Executive Directors.
The Human Resource & Remuneration Committee determines the compensation of the CEO based on the performance appraisal. |
| (Principle B.1.5 - Remuneration Committees should consult the Chairman and/or Chief Executive Officer about their proposals relating to the remuneration of other Executive Directors and have access to professional advice inside and outside the Company) |
The Human Resource & Remuneration Committee is headed by the Chairman. The CEO provides information to the Committee and is involved in any deliberations.
The Committee has access to obtain professional services from local and international firms. |
| B.2 - Level and Make up of Remuneration |
Determination of the Level of Remuneration of both Executive and Non-Executive Directors
(Principle B.2 - Levels of remuneration of both Executive and
Non-Executive Directors should be sufficient to attract and retain the Directors needed to run the Company successfully, but companies should avoid paying more than is necessary for this purpose. A proportion of Executive Directors’ remuneration should be structured so as to link rewards to corporate and individual performance) |
Remuneration increment for all staff including the CEO being the only Executive Director, is based on achievement of Bank/Individual objectives. Due care is taken to manage the fixed and variable remuneration costs. |
| (Principle B.2.1 - The Remuneration Committee should provide the packages needed to attract, retain and motivate Executive Directors of the quality required but should avoid paying more than is necessary for this purpose) |
A sufficiently attractive remuneration package is offered to both the CEO and the Non-Executive Directors in order to attract and retain them. |
| (Principle B.2.2 - Remuneration Committees should judge where to position their Company relative to other companies. They should be aware what comparable companies are paying and should take account of relative performance. But they should use such comparisons with caution, in view of the risk that they can result in an upward ratchet of remuneration levels with no corresponding improvement in performance) |
The Remuneration Committee obtains services of local and international companies to conduct salary surveys to benchmark compensation packages with the external markets. |
| (Principle B.2.3 - Remuneration Committees should be sensitive to the wider scene, including pay and employment conditions elsewhere in the Group, especially when determining annual salary increases) |
| (Principle B.2.4 - The performance-related elements of remuneration of Executive Directors should be designed and tailored to align their interests with those of shareholders and to give these Directors appropriate incentives to perform at the highest levels) |
Compensation and benefits structure of the Bank is determined in accordance to the overall targets of the Bank. |
| (Principle B.2.5 - Executive share options should not be offered at a discount (i.e. less than prevailing market price at the time the exercise price is determined) same as permitted by the Listing Rules) |
The prices of the options at the time of their award are determined at the average market prices of the voting shares during the last three months of each year. |
| (Principle B.2.6 - In designing schemes of performance-related remuneration, Remuneration Committees should follow the provisions stipulated in the Code set out by ICASL) |
The Committee considers the overall achievement and performance of the Bank when determining the variable pay plan. |
| (Principle B.2.7 - Board should have as an objective to set notice periods of one year or less so as not to disrupt the smooth functioning of the business) |
The Bank is in the process of regularising this requirement. |
| (Principle B.2.8 - Remuneration Committees should consider what compensation commitments (including pension contributions) their Directors’ contracts of service, if any, would entail in the event of early termination. Remuneration Committees in particular, consider the advantages of providing explicitly in the initial contract for such compensation commitments except in the case of removal for misconduct) |
There are no terminal compensation commitments available to the Directors of the Bank. |
| (Principle B.2.9 - Where the initial contract does not explicitly provide for compensation commitments, remuneration committees should, within legal constraints, tailor their approach in individual early termination cases to the wide variety of circumstances. The broad aim should be to avoid rewarding poor performance while dealing fairly with cases where departure is not due to poor performance and to take a robust line on reducing compensation to reflect departing Directors’ obligations to mitigate loss) |
There are no terminal compensation commitments available to the Directors of the Bank. |
| B.3 - Disclosure of Remuneration |
Disclosure of Remuneration to the Board as a Whole and Statement in the Annual Report on the Policy Adopted in Remuneration
(Principle B.3 - The Company’s Annual Report should contain a statement of remuneration policy and details of remuneration of the Board as a whole) |
The Report issued by the Human Resource & Remuneration Committee is disclosed.
The remuneration of the CEO and the Non-Executive Directors is disclosed. |
| (Principle B.3.1 - Total of the Executive Directors and the total of the Non-Executive Directors remuneration and not the individual remuneration to be disclosed) |