Singapore Airlines 2006 Annual Report Download - page 39

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Singapore Airlines Annual Report 05/06
CORPORATE GOVERNANCE REPORT
For the period 1 April 2005 to 31 March 2006
The remuneration of the Company’s key executives for 2005-06 is as follows:
Stock options granted
Bonus during the year
Fee Salary Fixed Variable# Benefi ts Total Number Exercise
price
% % % % % % $
Between $1,250,001 to $1,500,000
Bey Soo Khiang – 35 3 55 7 100 152,000 11.28
Between $1,000,001 to $1,250,000
Huang Cheng Eng – 38 3 52 7 100 135,000 11.28
# Includes profi t-sharing bonus determined on an accrual basis for the fi nancial year ended 31 March 2006.
Details of the Company’s Employee Share Option Plan can be found on page 62 of the Report by the Board of Directors.
In addition to the Company’s Employee Share Option Plan, the Company had introduced two new share plans, the
SIA Restricted Share Plan (RSP) and the SIA Performance Share Plan (PSP), which were approved by shareholders at
the Extraordinary General Meeting of the Company held on 28 July 2005. These plans were introduced with a view
to further strengthening the Company’s competitiveness in attracting and retaining talented key senior management
and senior executives. The RSP and PSP aim to more directly align the interests of key senior management and senior
executives with the interests of Shareholders, to improve performance and achieve sustainable growth for the Company
in the changing business environment, and to foster a greater ownership culture amongst key senior management and
senior executives. These plans contemplate the award of fully paid Shares, when and after pre-determined performance
or service conditions are accomplished. Non-executive Directors of the Group are not eligible to participate in the RSP
and PSP.
The RSP serves as an additional motivational tool to recruit and retain talented senior executives as well as to reward
for Company and individual performance. In addition, it enhances the Group’s overall compensation packages,
strengthening the Group’s ability to attract and retain high performing talent. The PSP is targeted at a select group of
key senior management who shoulder the responsibility for the Company’s performance and who are able to drive
the growth of the Company through innovation, creativity and superior performance. Awards under the PSP are
performance-based, with performance targets to be based on medium-term corporate objectives covering market
competitiveness, quality of returns, business growth and productivity growth. The performance targets are stretched
targets based on criteria such as total shareholders’ return, economic value added, market share, market ranking or
return on sales.
Awards granted under the RSP, which is intended to apply to a broader base of senior executives, will vest only after
the satisfactory completion of time-based service conditions, that is, after the participant has served the Group for a
specifi ed number of years (time-based restricted awards) or, where the award is performance-based (performance-
based restricted awards), after a further period of service beyond the performance target completion date. No minimum
vesting periods are prescribed under the RSP, and the length of the vesting period(s) in respect of each award will be
determined on a case-by-case basis. SIA intends to award performance-based restricted awards to ensure that the
earning of Shares under the RSP is aligned with the pay-for-performance principle. The use of time-based restricted
awards will only be made on a case-by-case basis where business needs justify such awards. Awards granted under
the PSP differ from that of the RSP in that an extended vesting period is usually (though not always) imposed for
performance-based restricted awards granted under the RSP beyond the performance target completion date, that is,
they also incorporate a time-based service condition as well, to encourage participants to continue serving the Group
beyond the achievement date of the pre-determined performance targets.