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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.

The RC comprises the following three independent non-executive directors as at the date of this report:

  • Chairman : Mr Chan Soo Sen
  • Member : Mr Lee Sen Choon
  • Member : Mr Adrian Chan Pengee

The RC is established for the purpose of ensuring that there is a formal and transparent procedure for fixing the remuneration packages of individual directors. The overriding principle is that no director should be involved in deciding his own remuneration. It has adopted written terms of reference that define its composition, procedures governing meetings, duties and powers, reporting procedures, disclosure in the annual report in compliance with the Code of Corporate Governance and procedures relating to changes in the RC’s Terms of Reference. Where necessary, the RC may seek professional advice on remuneration matters.

The duties of the RC are as follows:

  1. reviewing and recommending to the Board, a remuneration policy framework and guidelines for remuneration of the Board and the CEO and key management personnel;
  2. determining specific remuneration packages for each of the directors and key management personnel covering all aspects of remuneration, including but not limited to directors’ fees, salaries, allowances, bonuses, options, share- based incentives and awards, and benefits in kind;
  3. seeking expert advice inside and / or outside the Company on remuneration of all directors, if necessary, and ensure that existing relationships, if any, between the Company and its appointed remuneration consultants will not affect the independence and objectivity of the remuneration consultants;
  4. reviewing the Company’s obligations arising in the event of termination of the executive directors’ and key management personnel’s contracts of service, to ensure that such contracts of service contain fair and reasonable termination clauses which are not overly generous, aim to be fair and avoid rewarding poor performance;
  5. recommending targets and measures for assessing the performance of each of the executive directors and key management personnel, for endorsement by the Board of Directors;
  6. where long-term incentives schemes have been implemented by the Company, reviewing whether executive directors and key management personnel should be eligible for benefits under the long-term incentives schemes;
  7. periodically considering and reviewing remuneration packages in order to maintain their attractiveness, so as to retain and motivate the directors and key management personnel; and
  8. considering the implementation of schemes to encourage non-executive directors to hold shares in the Company so as to better align the interests of such non-executive directors with the interests of shareholders.

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.

One of the responsibilities of the RC is to review the remuneration framework of the Board and key management personnel in the Group, and to consider and review the remuneration package and / or service contract terms for each of the directors and key management personnel.

Executive directors do not receive directors’ fees. They have service agreements with the company that are renewed every three years. In addition to the basic salary component and benefits-in-kind, the executive directors’ remuneration is linked to performance via a tiered incentive bonus based on profit before tax. The Remuneration Committee reviews the audited group financial results against the targets achieved before approving the distribution of the annual incentive bonus.

The independent non-executive directors are paid director’s fees, consisting of a base fee for their appointments in the Board and its committees, fees for chairing each board committee and taking up additional appointment of Lead Independent Director, for their effort and time spent and for their responsibilities and contribution to the Board.

The fee structure is as follows:
Base fee for appointments in the Board and its committees $47,000
Additional fee for chairing each Board Committee $3,000
Additional fee for appointment as Lead Independent Director $2,000

The RC had recommended to the Board an amount of $152,000 as Directors’ fees to be paid for FY2017, which will be tabled for shareholders’ approval at the forthcoming AGM.

Key management remuneration comprises basic salary and a variable bonus which is based on individual and Group performance as a whole for that year. Key performance indicators that determine performance are different for each key management personnel.

Since FY2013, the Company has commenced the use of contractual provisions for key management positions whereby the Company shall have the right to reclaim all or any portion of bonus payment within the last three fiscal years in the event of significant restatement of the Company’s financial statements due to fraud or misconduct committed by the bonus recipient.

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.

For competitive reasons and difference in salary benchmarks across the countries we operate in, the Company shall disclose the remuneration of individual executive directors and the top five key management personnel on a named basis in bands of $250,000.

The breakdown of remuneration for each director and the top five key employees for FY2017 are as follows:

  Remuneration Band/Remuneration Salary1 (%) Bonus
(%)
Benefits-in-kind (%) Fees
(%)
Total
(%)
Executive Directors
Dr Dora Hoan Beng Mui $4,000,000 to $4,250,000 22 77 1 - 100
Dr Doreen Tan Nee Moi $4,000,000 to $4,250,000 22 77 1 - 100
Mr Huang Ban Chin $2,000,000 to $2,250,000 28 71 1 - 100
Independent Directors
Mr Lee Sen Choon $52,000 - - - 100 100
Mr Ravindran Ramasamy2 $50,000 - - - 100 100
Mr Chan Soo Sen $50,000 - - - 100 100
Top Five Key Management Personnel
Mr Simon Yeh $500,000 to $750,000 34 66 - - 100
Mr Jerry Lu Shih Chieh $250,000 to $500,000 55 45 - - 100
Ms Koh Hui $250,000 to $500,000 53 46 1 - 100
Dr Gan Kok Wee $250,000 to $500,000 57 43 - - 100
Mr Sugiharto Husin $250,000 to $500,000 53 46 1 - 100

(1) Comprises salary and all CPF contributions

(2) Mr Ravindran Ramasamy resigned on 31 December 2017

There are no extraordinary termination, retirement and post-employment benefits granted to the directors and the top five key management personnel. Compensation for immediate termination is the notice period remuneration unless termination is due to misconduct, where no compensation will be granted.

The aggregate of the total remuneration paid to the top five key management personnel for FY2017 is $1,991,000.

Details of the remuneration of employees who are immediate family members of a director or the CEO, and whose remuneration exceeds $50,000 during the year are disclosed as follows:

Immediate Family Member of Director Relationship with director Designation Remuneration Bands
Hoan Beng Hua Brother of Dr Dora Hoan Beng Mui Senior Production Supervisor $100,000 – $150,000
Tan Sing Keng, Joseph Brother of Dr Doreen Tan Nee Moi Warehouse Assistant $50,000 – $100,000

As mentioned in the policy for remuneration above, bonus targets are used to drive performance and amounts declared are based on individual performance and company performance as a whole for FY 2017.

Long Term Incentive Scheme
The Company has a performance share scheme known as the BWI Performance Share Scheme (the “Scheme”) which is administered by the Remuneration Committee.

There were no share awards granted during the financial year under the Scheme. No new shares have been issued during the financial year by virtue of the grant of share awards under the Scheme.

The Circular to Shareholders dated 8 April 2009 containing the details of the Scheme is available to shareholders upon their request.