Singapore Airlines 2009 Annual Report Download - page 36

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Remuneration Matters (Principles 7, 8 and 9)
Remuneration Mix
In addition to base salary and benefi ts, SIA has in place short-term and long-term incentive plans to motivate and
reward employees in striving to meet the targets set under these plans.
Short-term incentives
Short-term incentives generally take the form of an annual profi t-sharing bonus. Payment of the variable bonus
is based on employees achieving the target levels in the following:
(i) SIA Group’s Return on Shareholders’ Fund
(ii) SIA Company’s Operating Profi t Margin
(iii) SIA Company’s Passenger Load Factor
Long-term incentives
The Company has put in place share-based remuneration programmes allowing employees to share in its growth
and success. These plans comprise the Performance Share Plan (PSP), Restricted Share Plan (RSP) and Employee
Share Option Plan (ESOP).
The ESOP was introduced in 2000 with the objective of promoting unity and team spirit through a sense of share
ownership. The last grant under the ESOP was made in July 2008. The Company will continue to review options
for compensation plans, which will incentivise employees in the longer term.
The PSP and RSP, which were approved by shareholders at the Extraordinary General Meeting of the Company
held on 28 July 2005, were introduced in 2006 with a view to further strengthen the Company’s competitiveness
in attracting and retaining talented key senior management and senior executives. The PSP and RSP 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 PSP and RSP contemplate the award of fully paid Shares, when and after pre-determined performance
and/or service conditions are met.
The selection of a participant and the number of shares which he would be awarded under the PSP or RSP will
be determined at the absolute discretion of the BCIRC which will take into account criteria such as his rank,
job performance, potential for future development and his contribution to the success and development of the
Company. The BCIRC has the discretion to review and amend performance conditions and target(s) where it feels
appropriate and as relevant to the business conditions. Non-executive Directors of the Group are not eligible to
participate in the PSP and RSP.
CORPORATE GOVERNANCE REPORT
For the period 1 April 2008 to 31 March 2009
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