|The RC should review and recommend to the Board a general framework of remuneration for the Board and key management personnel8. The RC should also review and recommend to the Board the specific remuneration packages for each director as well as for the key management personnel. The RC's recommendations should be submitted for endorsement by the entire Board. The RC should cover all aspects of remuneration, including but not limited to director's fees, salaries, allowances, bonuses, options, share-based incentives and awards, and benefits in kind.|
This Guideline explains the process for establishing a remuneration framework.
An appropriately designed remuneration framework can attract and retain the key talent required for the company’s success. It also helps the RC and the Board with remuneration-based decisions.
The Guideline specifies that the components of the remuneration framework should include all aspects of remuneration including fees, salaries, allowances, bonuses, share options, share-based incentives and awards, and benefits in kind.
It also specifies that the framework needs to be tailored to the specific role and circumstances of each director and Key Management Personnel (KMP).This ensures an appropriate remuneration level that recognises the performance and potential of these individuals.
While remuneration matters are deliberated in detail by the RC, its remit is only to make recommendations to the Board. The Guideline makes it clear that the Board is ultimately accountable for all remuneration decisions.
B. SGX Disclosure Guide
C. Related Rules and Regulations
- SGX MR Appendix 2.2(9)(c) and CR Appendix 4C(9)(c): Articles of Association.
- SGX MR 1207(13), (14), (15) and CR 1204(13), (14), (15): Annual Reports (Directors’ and Key Executives’ Remuneration).
D. CG Guides
- RC Guide 3.1: Introduction [Non-Executive Director Fees].
- RC Guide 3.2: Non-Executive Director Fee Philosophy [Non-Executive Director Fees].
- RC Guide 3.3: Non-Executive Director Fee Components [Non-Executive Director Fees].
- RC Guide 3.4: Use of Equity [Non-Executive Director Fees].
- RC Guide 3.5: Determining Non-Executive Director Fees [Non-Executive Director Fees].
- RC Guide Appendix 3C: Sample Non-Executive Director Fee Framework for Boards of Subsidiary Companies [Non-Executive Director Fees].
- RC Guide 4.1: Introduction [Executive Remuneration].
- RC Guide 4.2: Executive Remuneration Philosophy [Executive Remuneration].
- RC Guide 4.3: Executive Remuneration Components [Executive Remuneration].
- RC Guide 4.4: Executive Remuneration Levels [Executive Remuneration].
- RC Guide 4.8: Executive Remuneration Administration [Executive Remuneration].
- RC Guide Appendix 4C: Sample Remuneration Framework [Executive Remuneration].
- RC Guide Appendix 4I: Framework for Setting Performance Goals [Executive Remuneration].
- RC Guide 5.4: Plan Design [Equity-Based Remuneration].
- RC Guide Appendix 7C: Sample Remuneration Framework Disclosure [Stakeholder Engagement].
E. Related Articles
- “CEO pay ratios: populism or good governance?” by Shai Ganu. (154KB)
- “Pay for results: aligning executive compensation with business performance” by Fermin Diez. (108KB)
- “Addressing remuneration matters as set forth in the new Code of Corporate Governance” by Na Boon Chong. (89KB)
- “Scrutinising Singapore’s top executive pay” by Kevin Goh. (1.1MB)
- “Are you providing the right pay package for your C-suites?” by Tan Yong Fei. (582KB)
- “What boards need to know about compensation management in the post-global financial crisis environment” by Na Boon Chong. (66KB)
The term "key management personnel" shall mean the CEO and other persons having authority and responsibility for planning, directing and controlling the activities of the company.