26
HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2014
CORPORATE
GOVERNANCE
2.2 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 and mix of remuneration, and the procedure for setting remuneration, in the company’s
annual report. 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.
The remuneration packages of the executive directors are determined based on the framework
recommended by the RC. In doing so, the RC reviews the length of the fixed appointment period,
the notice period for termination and the terms of the compensation package in the event of the
termination of any executive directors’ contracts of service to ensure that the terms of such clauses
are not onerous to the Company. The executive directors’ framework of remuneration includes a fixed
element as well as a variable element in the form of a bonus and a profit sharing incentive which is
linked to the Company’s performance.
All non-executive directors are paid a director’s fee, with additional fees for serving as the chairman or
member of a board committee and attendance fees for Board and board committee meetings. These
fees are recommended by the RC and submitted to the Board for endorsement. The remuneration of
non-executive directors should be appropriate to the level of contribution, taking into account factors
such as effort and time spent, and responsibilities of the directors. Non-executive directors should
not be over-compensated to the extent that their independence may be compromised.
An employee share option scheme (“ESOS”) was approved by the shareholders of the Company at
the Extraordinary General Meeting of the Company held on 12 January 2012 as a compensation
scheme for selected employees of the Group who, in the opinion of the appointed committee under
the ESOS, have contributed or will contribute to the success of the Group.
The ESOS is administered by the RC. The ESOS will, subject to the approval of the shareholders,
be renewed at the forthcoming Annual General Meeting of the Company.
No options were granted under the ESOS for the financial year ended 31 December 2014.
