OVERVIEW PERFORMANCE SUSTAINABILITY FINANCIALS APPENDIX 143 ANNUAL REPORT 2024 have the potential of increasing the performance of the Group. In designing the remuneration structure, the NRC seeks to ensure that the level and mix of remuneration is competitive and relevant in attracting, motivating and retaining employees. The NRC also ensures that the remuneration structure is aligned with the interests of the stakeholders and promotes long-term success and sustainable growth of the Group. The balance between fixed and variable compensation elements changes according to the individual employee’s performance, value creation, seniority and department, so as to incentivise employees into adopting appropriate risk behaviour and to remain focused on prudent risk management. The NRC considers the mix of fixed and variable compensation to be appropriate for the Group and for each individual role. The remuneration structure also takes into account the Group’s risk policies and risk tolerance limits, as well as the time horizon of risks, in order to build sustainable leadership and business in the long-term. The NRC is satisfied that there are adequate risk mitigation features in the Group’s remuneration structure with prudent funding of annual cash compensation. The NRC is also of the view that the overall level of remuneration is not considered to be at a level which is likely to promote behaviour contrary to the Group’s risk profile. The NRC also has the discretion to claw back any incentives awarded earlier if an executive is subsequently found to be involved in misconduct or fraud resulting in financial loss to the Group. The NRC will continue to undertake periodic reviews of compensation-related risks. In determining the remuneration of KMP, the Group leverages external consultants’ data on pay benchmarks as guidance and compares itself against peer companies and comparably-sized local listed companies with which the Group competes for talent and capital. The NRC is of the view that the remuneration of KMP is competitive and fair, and they have met their respective performance targets. Level and Mix of Remuneration The remuneration mix for KMP comprises two key components: fixed and variable compensation. These components comprise various elements which ensure a close linkage between total compensation and the achievement of long-term business objectives, thereby driving sustainable performance for the Group. As part of the Group’s formal succession planning, HR assists in identifying the critical positions at the management level. The requirements of and gaps in these positions are determined before mapping succession to the pipeline of internal high-potential executive talents that have been identified. HR recognises the need to support identified talents within the Group’s international talent pipeline with developmental efforts to prepare them for designated roles with adequately designed and implemented career development plans. These plans include on-the-job assignments, job rotations, international assignments and assuming larger or different roles in the organisation. HR also reviews and surveys the practices of other corporations and harmonises best practices that are suited to the Group’s culture, structure and strategy. Fixed Compensation (i) Base Salary and Compulsory Employer Contribution Base salary is determined by benchmarking against similar and comparable industries, taking into account an individual’s responsibilities, competencies, performance, value creation, qualifications and experience. (ii) Market-Related Benefits The market-related benefits provided are comparable with local market practices. Variable Compensation The variable compensation is designed to support the Group’s business strategy and the ongoing creation of shareholder value through the delivery of annual financial and operational objectives. (i) Annual Performance Incentive This is a short-term incentive that is linked to the achievement of pre-agreed financial and non-financial performance targets for the Group and individual employees. Group-wide performance targets are dependent on factors such as business performance, profitability, and operational growth. Individual performance targets are set at the beginning of each financial year and are aligned to the overall strategic, financial and operational goals of the Group. This encourages day-to-day behaviour and actions that are aligned towards the creation of value for shareholders and stakeholders. In determining the cash payout quantum for employees, the NRC takes into account overall business performance and individual performance, amongst other considerations. (ii) Long-Term Incentive Plan This is a long-term incentive plan introduced in 2021 which is designed to motivate, reward and retain high performing employees by incentivising the long-term commitment of such employees. The NRC takes into account business performance and individual performance to determine the eligibility and the quantum payable. NON-EXECUTIVE DIRECTORS Non-Executive Directors make up a majority of the Board. With their experience and expertise in their respective fields, they provide valuable advice and guidance to the Board. In addition, they also provide an independent check on Management. The Executive Chairman and CEO works together with the Non-Executive Directors to build a sustainable business and the long-term success of the Company. EXECUTIVE CHAIRMAN AND CEO The Executive Chairman and CEO is responsible for providing the Group with strong leadership and leading the Board in discharging its duties effectively. He also ensures the effective functioning of the Board in all aspects of its role. He facilitates the relationship and information flow within and between the Board and Management, sets the agendas for Board meetings with inputs from Management, ensures sufficient allocation of time for thorough discussion of each agenda item at Board meetings, and engages the Board and Management in effective discussions. The Executive Chairman and CEO also promotes an open environment for deliberation and ensures that the Board meetings are conducted objectively and professionally, where all views are heard and debated in a fair and open manner. At the same time, the Executive Chairman and CEO also monitors follow-
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