KINGSMEN CREATIVES LTD
ANNUAL REPORT
2014
25
2.
REMUNERATION MATTERS
Procedures for Developing Remuneration Policies
Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration
and for fixing the remuneration packages of individual directors. No director should be involved in deciding his own
remuneration.
Level and Mix of Remuneration
Principle 8: The level and structure of remuneration should be aligned with the long-term interest and risk policies of
the company, and should be appropriate to attract, retain and motivate (a) the directors to provide good stewardship
of the company, and (b) key management personnel to successfully manage the company. However, companies should
avoid paying more than is necessary for this purpose.
Disclosure on Remuneration
Principle 9: Every company should provide clear disclosure of its remuneration policies, level andmix of remuneration,
and the procedure for setting remuneration. It should provide disclosure in relation to its remuneration policies to
enable investors to understand the link between remuneration paid to directors and key management personnel, and
performance.
Remuneration Committee
The RC is chaired by Mr Tan Cher Liang and comprises Mr Prabhakaran S/O Narayanan Nair and Mr Wong Ah Long. All
the RC members, including the Chairman, are independent directors. The principal function of the RC, in accordance with
its written terms of reference, is to set the remuneration guidelines and policies of the Group. The RC also administers the
Kingsmen Performance Share Scheme (the
Scheme
). Details of the Scheme are contained in the section entitled “Directors’
Report” of this Annual Report.
The Board considers that the members of the RC, who each have years of experience in senior management positions and/or
on the boards of various listed companies, collectively have strong management experience and expertise on remuneration
issues. If necessary, the RC members may seek professional advice inside and/or outside the Company on the remuneration
of all directors and management.
Procedures for Setting Remuneration
The Company has implemented a formal and transparent procedure for developing policy on executive remuneration and
for fixing the remuneration packages of individual directors. The RC reviews and recommends to the Board a general
framework of remuneration and specific remuneration packages for the Board and management, covering all aspects of
remuneration including directors’ fees, salaries, allowances, bonuses, options, share-based incentives and awards, and
benefits-in-kind. The RC’s recommendations are submitted for endorsement by the entire Board. Each RC member does not
participate in discussions, and abstains from decision-making, relating to any remuneration, compensation, options or any
form of benefits to be granted to him.
The RC also reviews the Company’s obligations, if any, arising in the event of termination of the executive directors’ and/
or management’s contracts of service, to ensure that the termination clauses of such contracts of service are fair and
reasonable.
Remuneration Policies
In order to maximise shareholders’ value and promote the long-term success of the Group, the Company seeks to attract,
retain and motivate management and employees by offering competitive remuneration packages. The remuneration of
our management and employees is set based on, inter alia, the relevant scope and extent of responsibilities, prevailing
market conditions, and comparable industry benchmarks. The Company rewards management and employees based on
achievement of individual performance objectives using indicators such as competencies, key result areas, performance
ratings and potential of the individual and the Group’s financial performance. The Board is of the view that this will
motivate our management and employees to achieve superior performance and promote the long-term growth of the
Group. Having reviewed and considered the variable components of the remuneration of management, which comprises
of bonus, incentives and/or share awards that are moderate, the RC is of the view that there is no requirement to institute
contractual provisions to allow the Company to reclaim these variable components of their remuneration paid in prior years
in exceptional circumstances of misstatement of financial results, or of misconduct resulting in financial loss. The executive
directors owe a fiduciary duty to the Company and the Company should be able to avail itself to remedies against the
executive directors in the event of a breach of fiduciary duties.
Executive Directors’ Remuneration
In accordance with the terms of their service agreements, each of our executive directors is entitled to, inter alia,
performance-related incentives which are linked to the financial performance of the Group and the individual performance
of each executive director. The terms of our executive directors’ service agreements and their remuneration packages are
subject to review by the RC. There are no excessive or onerous removal clauses in these service agreements.
Corporate Governance Report
