Singapore Airlines 2014 Annual Report Download - page 55

Share Incentive Plans
i. The SIA Performance Share Plan (“PSP”)
The PSP is a share-based incentive scheme established with the objective of rewarding, motivating, and retaining a select
group of key Senior Management staff who shoulder the responsibility for the Group’s performance and who are able to drive
the growth of the Group through innovation, creativity and superior performance. Awards under the PSP are performance-
based, with stretched targets.
Under the PSP, an initial award is made in the form of rights to shares, provided performance targets are met. Annual awards
are made based on strategic contribution of Senior Management staff. The final award, which can vary between 0-200% of
the initial award, depends on stretched value-aligned performance targets. They are based on absolute and relative Total
Shareholder Return (“TSR”), meeting targets over the performance period of three financial years. The relative TSR is based
on outperformance of a selected peer group of leading full service carriers. The absolute TSR is based on outperformance
against Cost of Equity hurdle. The above performance measures are selected as key measurements of wealth creation
for shareholders.
ii. The SIA Restricted Share Plan (“RSP”)
The RSP is targeted at a broader base of senior executives and enhances the Company’s ability to recruit and retain talented
senior executives, as well as to reward for Group, Company and individual performance. To retain key executives, an extended
vesting period of a further two years is imposed beyond the initial two-year performance period.
Under the RSP, an initial award is made in the form of rights to shares, provided performance conditions are met in future.
Annual grants are made based on individual performance of the key executives selected to participate in the RSP. Final awards
may vary between 0-150% of the initial award, depending on the extent to which targets based on Group and Company
EBITDAR Margin and Group and Company Staff Productivity are met. The performance measures are selected as they are key
drivers of shareholder value and are aligned to the Group and the Company’s business objectives. The final award is subject
to extended vesting, with 50% of the final award paid out at the end of the two-year performance period, and the rest paid
out equally over the next two years.
iii. The SIA Deferred Share Award (“DSA”)
The DSA is a one-off share award established with the objective of rewarding, motivating and retaining Senior Management,
who are participants of EBIP and who shoulder the responsibility for the Group’s strategic performance. It was funded from
unallocated EBIP accrued from previous years and granted on a contingent basis under the SIA RSP during FY2013/14. The
final award, which includes the Accumulated Dividend Yield (based on the sum of SIA share dividend yields declared with
ex-dividend dates occurring during the vesting period), will cliff vest at the end of three calendar years from the grant date,
contingent on meeting future individual strategic performance and service-based conditions.
The total number of ordinary shares which may be issued pursuant to awards granted under the RSP and PSP, when added
to the number of new shares issued and issuable in respect of all awards under the RSP and PSP, and all options under the
Employee Share Option Plan (“ESOP”), shall not exceed 13% of the issued ordinary share capital of the Company. In addition
the maximum number of new shares that can be issued pursuant to awards granted under the RSP and PSP in the period
between the current AGM to the next AGM shall not exceed 0.75% of the total number of issued ordinary shares in the capital
of the Company.
Details of the PSP, RSP and ESOP can be found on pages 89 to 92 of the Report by the Board of Directors.
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ANNUAL REPORT FY2013/14