Cathay Pacific 2009 Annual Report Download - page 46

Corporate Governance
Remuneration Committee
The Remuneration Committee comprises two
independent non-executive Directors, Irene Lee and
Tung Chee Chen, and is chaired by the Company’s past
Chairman, James W.J. Hughes-Hallett who is also a
non-executive Director.
Under the Services Agreement between the Company
and JSSHK, which has been considered in detail and
approved by the Directors of the Board who are not
connected with the Swire group, staff at various levels,
including executive Directors, are seconded to the
Company. Those staff report to and take instructions
from the Board of the Company but remain employees
of Swire.
In order to be able to attract and retain international
staff of suitable calibre, the Swire group provides a
competitive remuneration package. This comprises
salary, housing, provident fund, leave passage and
education allowances and, after three years’ service, a
bonus related to the profit of the overall Swire group.
The provision of housing affords ease of relocation
either within Hong Kong or elsewhere in accordance
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/her
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
2009 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 one meeting
during 2009, the attendance of which was as follows:
James W.J. Hughes-Hallett (1/1), Peter Lee (1/1) and
Tung Chee Chen (1/1).
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