Cathay Pacific 2008 Annual Report Download - page 45

Cathay Pacific Airways Limited Annual Report 2008 43
Corporate Governance
with the needs of the business and as part of the
training process whereby managers gain practical
experience in various businesses within the Swire
group, and payment of bonuses on a group-wide basis
enables postings to be made to group companies with
very different profitability profiles. Whilst bonuses are
calculated by reference to the profits of the Swire
group overall, a significant part of such profits are
usually derived from the Company.
Although the remuneration of these executives is not
entirely linked to the profits of the Company, it is
considered that, given the volatility of the aviation
business, this has contributed considerably to the
maintenance of a stable, motivated and high-calibre
senior management team in the Company.
Furthermore, as a substantial shareholder of the
Company, it is in the best interest of Swire to see that
executives of high quality are seconded to and retained
within the Company.
A number of Directors and senior staff with specialist
skills are employed directly by the Company on similar
terms.
This policy and the levels of remuneration paid to
executive Directors of the Company were reviewed by
the Remuneration Committee. At its meeting in
November, the Remuneration Committee considered a
report prepared for it by independent consultants,
Mercer Human Resources Consulting Limited, which
confirmed that the remuneration of the Company’s
executive Directors was in line with comparators in
peer group companies. The Committee approved
individual Directors’ remuneration packages to be paid
in respect of 2009.
No Director takes part in any discussion about his own
remuneration. The remuneration of independent non-
executive Directors is determined by the Board in
consideration of the complexity of the business and
the responsibility involved.
Annual fees of independent non-executive Directors in
2008 were as follows:
Director’s fee HK$500,000
Fee for serving as Audit
Committee chairman HK$200,000
Fee for serving as Audit
Committee member HK$150,000
Fee for serving as Remuneration
Committee chairman HK$65,000
Fee for serving as Remuneration
Committee member HK$50,000
The Remuneration Committee held three meetings
during 2008, the attendance of which was as follows:
James W.J. Hughes-Hallett (3/3), Peter Lee (3/3) and
Tung Chee Chen (2/3).
Audit Committee
The Audit Committee is responsible to the Board and
consists of four non-executive Directors, three of
whom are independent. The members currently are
Peter Lee, Jack So and Zhang Lan. It is chaired by an
independent non-executive Director, Raymond Or.
The Committee reviewed the completeness, accuracy
and fairness of the Company’s reports and accounts
and provided assurance to the Board that these
comply with accounting standards, stock exchange and
legal requirements. The Committee also reviewed the
adequacy and effectiveness of the internal control and
risk management systems, including the adequacy of
the resources, qualifications and experience of the
staff of the Company’s accounting and financial
reporting function, and their training programmes and
budget. It reviewed the work done by the internal and
external auditors, the relevant fees and terms, results
of audits performed by the external auditors and
appropriate actions required on significant control
weaknesses. The external auditors, the Finance
Director and the Internal Audit Manager also attended
these meetings.
The Audit Committee held three meetings during
2008, the attendance of which, taking into account
dates of appointment or resignation, was as follows:
Peter Lee (3/3), Vernon Moore (2/2), Raymond Or (3/3),
Jack So (1/3) and Zhang Lan (0/1).
Expenditure Control Committee
The Expenditure Control Committee meets monthly to
evaluate and approve capital expenditure. It is chaired
by one executive Director, John Slosar and comprises
two executive Directors, James E. Hughes-Hallett and
Ian Shiu.