HC-5 HC-5 Remuneration of Directors and Officers
HC-5.1 HC-5.1 Principle
HC-5.1.1
The company must remunerate directors and officers fairly and responsibly.
July 2011HC-5.2 HC-5.2 Remuneration Committee
HC-5.2.1
The board must establish a remuneration committee of at least three directors which must:
(a) Review the company'sremuneration policies for the board of directors and senior management (holdingcontrolled functions ), which must be approved by the shareholders and be consistent with the corporate values and strategy of the company;(b) Make recommendations regardingremuneration policies and amounts for specific persons to the whole board, taking account of totalremuneration including salaries, fees, expenses and employee benefits; and(c) Recommend board member remuneration based on their attendance and performance.Amended: January 2012
July 2011HC-5.2.2
Prior to any vote by the shareholders, the chairman of the board should ensure that full disclosure of all material facts has been made to the shareholders.
July 2011HC-5.2.3
The committee may be merged with the nominating committee.
July 2011HC-5.3 HC-5.3 Remuneration Committee Charter
HC-5.3.1
The committee must adopt a written charter which must, at a minimum, state the duties in Rule HC-5.2.1 and other matters in Appendix C of this Module.
July 2011HC-5.3.2
The committee should include only
independent directors or, alternatively, onlynon-executive directors of whom the majority areindependent directors and the chairman is anindependent director . This is consistent with international best practice and it recognises that the remuneration committee must exercise judgment free from personal career conflicts of interest.July 2011HC-5.3.3
[This Paragraph was deleted in January 2012].
Deleted: January 2012HC-5.4 HC-5.4 Standard for All Remuneration
HC-5.4.1
Remuneration of both directors and officers must be sufficient enough to attract, retain and motivate persons of the quality needed to run the company successfully, but the company must avoid paying more than is necessary for that purpose.July 2011HC-5.5 HC-5.5 Non-Executive Directors' Remuneration
HC-5.5.1
Remuneration ofnon-executive directors must not include performance-related elements such as grants of shares, share options or other deferred stock-related incentive schemes, bonuses, or pension benefits.July 2011HC-5.6 HC-5.6 Officers Remuneration
HC-5.6.1
Remuneration of officers must be structured so that a portion of the total is linked to the company and individual performance and aligns their interests with the interests of the shareholders.July 2011HC-5.6.2
Such rewards may include grants of shares, share options and other deferred stock-related incentive schemes, bonuses, and pension benefits which are not based on salary.
July 2011HC-5.6.3
If an officer is also a director, his
remuneration as an officer must take into account compensation received in his capacity as a director.July 2011HC-5.6.4
All share incentive plans must be approved by the shareholders.
July 2011HC-5.6.5
All performance-based incentives should be awarded under written objective performance standards which have been approved by the board and are designed to enhance shareholder and company value, and under which shares should not vest and options should not be exercisable within less than two years of the date of award of the incentive and include principles of deferred payment, claw back provisions and prevention of distribution during non-profit years, as well as other
remuneration principles issued by relevant industry supervisory bodies.July 2011HC-5.6.6
All policies for performance-based incentives should be approved by the shareholders, but the approval should be only of the plan itself, and not of the grant to specific individuals of benefits under the plan.
Amended: January 2012
July 2011
