KIM HENG OFFSHORE & MARINE HOLDINGS LIMITED
34
Corporate Governance Report
The RC is responsible for ensuring a formal and transparent procedure is in place for fixing the remuneration packages
of individual Directors, key management personnel and related employees. All aspects of remuneration, including but
not limited to, Directors’ fees, salaries, allowances, bonuses, awards to be granted under the performance share plan
and the options to be issued under the employee share option scheme as well as other benefits-in-kind are reviewed
by the RC. The recommendations of the RC are submitted for endorsement by the Board. Such frameworks are
reviewed periodically to ensure that the Directors and key management personnel are adequately but not excessively
remunerated as compared to industry benchmarks and other comparable companies.
The Executive Directors do not receive Directors’ fees. The annual variable bonus and performance-related component
of remuneration is designed to align the interests of the Executive Directors with those of the shareholders and link
rewards to the Group’s financial performance.
The RC reviews the fairness and reasonableness of the termination clauses of the service agreements of the Executive
Directors and key management personnel to ensure that such contracts of service contain fair and reasonable
termination clauses which are not overly generous, with an aim to be fair and avoid rewarding poor performance.
Each of the Executive Directors has a service agreement with the Company which can be terminated by the Company
(without prejudice to and in addition to any other remedy) by giving not less than six (6) months’ written notice. The
appointment of such senior position is on a long-term basis and no onerous removal clauses are contained in their
respective service agreement.
The RC is of the view that it is currently not necessary to use contractual provisions to allow the Company to reclaim
incentive components of remuneration from the Executive Directors and key management personnel in exceptional
circumstances of misstatement of financial statements, or of misconduct resulting in financial loss to the Company
and the Group.
The remuneration of Non-Executive Directors is in the form of a fixed fee which will be subject to shareholders’
approval at the AGM. Each member of the RC abstains from voting on any resolutions in respect of his own
remuneration package.
The remuneration of related employees will be reviewed annually by the RC to ensure that their remuneration
packages are in line with the staff remuneration guidelines and commensurate with their respective job scopes and
level of responsibilities. Any bonuses, pay increments and/or promotions for these related employees will also be
subject to the review and approval of the RC. In the event that a member of the RC is related to the employee under
review, he will abstain from participating in the review.
The RC also oversees the administration of the Kim Heng Share Employee Share Option Scheme (“
Kim Heng ESOS
”)
and Kim Heng Performance Share Plan (“
Kim Heng PSP
”) (as well as such other similar share plans as may be
implemented by the Company from time to time) upon the terms of reference as defined in the Kim Heng ESOS and
Kim Heng PSP. Both Kim Heng ESOS and Kim Heng PSP, which were established on 26 December 2013, had a 10-year
tenure commencing on the establishment date.
Where necessary, the RC will consult external professionals on remuneration matters of the Directors and key
management personnel. No remuneration consultants were engaged by the Company in FY2015.
Disclosure on Remuneration
Principle 9:
Every company should provide clear disclosure of its remuneration policies, level and mix of
remuneration, and the procedure for setting remuneration, in the company’s Annual Report. It
should provide disclosure in relation to its remuneration policies to enable investors to understand
the link between remuneration paid to directors and key management personnel, and performance.
