Cathay Pacific 2011 Annual Report Download - page 46

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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 2011, 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 2012.
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
2011 were as follows:
Director’s fee HK$575,000
Fee for serving as Audit
Committee chairman HK$240,000
Fee for serving as Audit
Committee member HK$180,000
Fee for serving as Remuneration
Committee chairman HK$75,000
Fee for serving as Remuneration
Committee member HK$58,000
The Remuneration Committee held two meetings during
2011, the attendance of which was as follows:
James W.J. Hughes-Hallett (2/2), Irene Lee (2/2) and Tung
Chee Chen (1/2).
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 Fan Cheng,
Irene Lee and Peter Wong. It is chaired by an
independent non-executive Director, Jack So.
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 2011,
the attendance of which, taking into account dates of
appointment or resignation/cessation, was as follows:
Fan Cheng (0/3), Irene Lee (3/3), Jack So (3/3) and Peter
Wong (0/3).
Corporate Governance