Cathay Pacific 2010 Annual Report Download - page 46

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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
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
2010 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 two meetings during
2010, the attendance of which was as follows:
James W.J. Hughes-Hallett (2/2), Irene Lee (2/2) and Tung
Chee Chen (2/2).
Corporate Governance