Singapore Airlines 2014 Annual Report Download - page 56

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The PSP and RSP are due to expire in July 2015. The BCIRC has recommended to the Board the adoption of a new performance
share plan and restricted share plan to replace the PSP and RSP respectively, and the Board has accepted the BCIRC’s
recommendations. The existing PSP and RSP will be terminated following the adoption of the new plans. The new plans will
have substantially the same terms as the existing plans, save that the total number of shares which may be delivered under
the new plans (whether in the form of shares or cash in lieu of shares) will be subject to a reduced maximum limit of 5%. In
addition, the total number of shares under awards to be granted under the new plans from the forthcoming Extraordinary
General Meeting (“EGM”) to the next AGM (the “Relevant Year”) shall not exceed 0.5% of the total number of issued shares
(excluding treasury shares) from time to time (the “Yearly Limit”). However, if the Yearly Limit is not fully utilised during the
Relevant Year, any unutilised portion of the Yearly Limit can be used for grants of awards in subsequent years. The ESOP
expired in 2010, and the Board will not be seeking to adopt a new share option plan to replace the ESOP. The new share plans
will be proposed to shareholders for approval at the forthcoming EGM of the Company.
Compensation Risk Assessment
Under the Code, the compensation system should take into account the risk policies of the Company, be symmetric with risk
outcomes and be sensitive to the time horizon of risks. The BCIRC has reviewed the various compensation risks that may arise and
introduced mitigating policies to better manage risk exposures identified. The BCIRC will also undertake periodic reviews of the
compensation related risks in future.
Pay-for-Performance Alignment
In performing the duties as required under its BCIRC Charter, the BCIRC ensures that remuneration paid to the CEO and Key
Management Personnel is strongly linked to the achievement of business and individual performance targets. The performance
targets as determined by the BCIRC are set at realistic yet stretched levels each year to motivate a high degree of business
performance with emphasis on both short- and long-term quantifiable objectives.
A pay-for-performance alignment study was conducted by the appointed external remuneration consultant and reviewed by
BCIRC. It was found that there was sufficient evidence indicating pay-for-performance alignment for the Group in both absolute
and relative terms, against a peer group of large listed airline companies for the six-year period from FY2007/08 to FY2012/13.
CORPORATE GOVERNANCE REPORT
054
SINGAPORE AIRLINES