Singapore Airlines 2016 Annual Report Download - page 70

account are at risk because negative EVA will result
in a retraction of EBIP bonus earned in preceding
years. This mechanism encourages key Senior
Management to work for sustainable EVA generation
and to adopt strategies that are aligned with the
long-term interests of the Group.
In determining the final EBIP payouts, the BCIRC
considers overall Group performance and relevant
market remuneration benchmarks.
The rules of the EBIP are subject to review by the
BCIRC, which has the discretion, under authority of
the Board, to amend the rules where appropriate and
relevant to the business conditions.
Based on the BCIRC’s assessment that the actual
performance of the Group in FY2014/15 has
outperformed / fully met / partially met / not met the
predetermined targets, the resulting annual payout
under the EBIP was adjusted accordingly to reflect the
performance level achieved.
c. Strategic Initiatives Incentive Plan (“SIP”)
The SIP is an incentive scheme established with the
objective of rewarding, motivating, and retaining a
select group of key Senior Management sta who
shoulder the responsibility for divisional-focused
strategic initiatives.
Under the SIP, a target bonus is set equal to three
times the monthly base salary of the respective Senior
Management sta for meeting strategic initiatives set
under the Individual Performance Scorecard. At the
end of the financial year, the target bonus is modified
by the incumbent’s performance on the execution of
the strategic initiatives as assessed by the BCIRC. The
resultant payout varies between 0-150% of the SIP
target bonus with settlement of 50% in cash and 50%
in shares under the Deferred Share Award (“DSA”).
The maximum SIP bonus payable is four and a half
times the individual’s monthly base salary.
The resulting annual payout under the SIP for each
incumbent was adjusted accordingly based on the
BCIRC’s assessment to reflect the actual individual
performance level achieved.
d. Transformational Initiatives Incentive Plan (“TIP”)
The TIP was established to reward for contribution
to future-oriented growth-based transformational
incentives. Under the TIP, a group funding pool of up
to three million Singapore Dollars in cash is allocated
individually to the eligible Senior Management sta.
The group funding pool scales from 0-100% at the
discretion of the BCIRC. Individual allocations are
distributed based on the incumbent’s position level
and performance in achieving pre-set individual
contributions to the Group’s transformational
initiatives, with the individual allocation ranging from
0-150%, subject to available funding and at the sole
discretion of the BCIRC.
The resulting annual payout under the TIP for each
incumbent was adjusted accordingly based on the
BCIRC’s assessment to reflect the actual individual
performance level achieved.
Share Incentive Plans
i. The SIA Performance Share Plan 2014 (“PSP 2014”)
The PSP 2014 is a share-based incentive scheme
established with the objective of rewarding,
motivating, and retaining a select group of key Senior
Management sta 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
2014 are performance-based, with stretched targets.
Under the PSP 2014, 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 and individual performance of Senior
Management sta. 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 absolute TSR is
based on outperformance against Cost of Equity.
The relative TSR is based on outperformance of a
Corporate
Governance Report
(continued)
Singapore Airlines68
PERFORMANCE