Singapore Airlines 2011 Annual Report Download - page 40

CORPORATE GOVERNANCE REPORT
For the period 1 April 2010 to 31 March 2011
SINGAPORE AIRLINES
038
Short-term incentives
Short-term incentives generally take the form of an annual profit-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 Profit 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 was made in July 2008. No additional grants will be made under the ESOP.
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.
The 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.
The SIA Performance Share Plan (PSP)
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 stretched performance targets
based on criteria such as absolute and relative total shareholders’ return to be achieved over a three-year
performance period.