FY 2011 Annual Report - Sheng Siong

26 Sheng Siong Annual Report 2011
Corporate Governance
These service agreements are for an initial term of three (3) years commencing from the date of the Company’s
listing on the SGX-ST, 17 August 2011, and are subject to an automatic renewal for a three (3) year term on
the same terms and conditions upon the expiry thereof. Each party to the service agreement may terminate
the agreement by giving the other contracting party not less than six (6) months notice in writing.
Under the terms of their service agreements, each of the Executive Directors is entitled to receive a fixed bonus
of two (2) months salary per annum. Each of them is also entitled to an annual incentive bonus calculated based
on the audited consolidated profit before income tax of the Group, and a car, health benefits, and accident
and life insurance coverage. More information on these service agreements is set out in the prospectus of the
Company dated 4 August 2011.
The non-executive Directors do not have service agreements with the Company. They are paid fixed Directors’
fees, which are determined by the Board, taking into account factors such as the level of their contribution,
the effort and time spent and their respective responsibilities. The Directors’ fees are subject to approval by
shareholders at each AGM.
Management’s remuneration
The remuneration package of Management comprises the following components:
(a) Fixed Component
The fixed component comprises basic salary, statutory employer’s contributions to the Central Provident
Fund, and fixed allowances. In setting remuneration packages, the RC may take into account industry
conditions, prevailing market practices, and the remuneration policies of comparable companies.
(b) Variable Component
This component comprises a variable bonus based on the Group’s and individual performance, as well
as a monthly variable component of the basic salary. To link rewards to performance, the more senior
the executive is in the Company, the higher the percentage of the variable component against total
compensation. A comprehensive and structured assessment of the performance of each executive
officer, against selected key performance indicators, is undertaken each year. The RC reviews bonus
for distribution to staff based on individual performance.
(c) Benefits
Benefits provided are consistent with market practice and include medical benefits and travel
allowances.
Disclosure on Remuneration
Principle 9: Each company should provide clear disclosure of its remuneration policy, 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 executive officers, and performance.