Corporate Governance Practices of the Company
RC to recommend remuneration framework and packages
The principal function of the RC is to ensure that a formal and transparent procedure is in place for fixing the remuneration framework and specific remuneration packages for the directors and key management personnel of the Group.
The duties of the RC under its terms of reference are as follows:
The RC’s considerations and recommendation for the fee framework of NEIDs had been made in consultation with the Co-Chairman of the Board and had been endorsed by the entire Board, following which the recommendation is tabled for shareholders’ approval at the Company’s AGM. No member of the RC or the Board participated in the deliberation of his/her own remuneration.
Composition of RC
The RC, regulated by a set of written terms of reference, comprises the following three independent non-executive directors as at the date of this report:
RC to consider and ensure all aspects of remuneration is fair
The RC considers all aspects of remuneration, namely, director’s fees, salaries, allowances, bonuses, share-based incentives and awards, other benefits-in-kind and termination terms, to ensure that they are fair. The remuneration packages of the executive Directors are based on their respective service agreements. There are no onerous compensation commitments on the part of the Company in the event of an early termination of the service of the executive directors.
Expert advice on remuneration
The RC has been reviewing the ED’s remuneration annually and has asked for market benchmarking studies to be conducted on a regular basis. In June 2023, the RC and the Board engaged HRguru for another market benchmarking exercise which was completed in August 2023.
HRguru reviewed the remuneration structure of the EDs individually and in aggregate against 41 comparable listed companies in Singapore where the controlling shareholders are similarly in management as in the case of Best World. Based on an above average financial performance vis-à-vis the comparable companies, the RC is satisfied that the total compensation for the ED’s is competitive. The RC also adopted HRguru’s recommendation to raise the performance threshold for the bonus payout, to better align with market practices, while continuing to motivate the ED’s to sustain their performance in driving the profitability of the company.
HRguru is an independent consulting company, selected after considering two other consulting firms. HRguru does not have any relationship with the company that could affect its independence and objectivity and worked mainly with the RC and the company’s HR manager for data collection and other administrative matters while EDs recused themselves from the benchmarking exercise.
Summary of RC’s activities in FY2023
Corporate Governance Practices of the Company
Remuneration of executive directors and other key management personnel are appropriately structured to link rewards to performance
The remuneration of the Company’s directors and key management personnel has been formulated to attract, retain and motivate individuals the Group relies on to provide good stewardship to the Company, achieve its business strategy and create long-term value for its shareholders. The RC believes that fair performance-related pay should motivate good corporate and individual performance and that rewards should be closely linked to and commensurate with it.
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 RC reviews the audited group financial results against the targets achieved before approving the distribution of the annual incentive bonus.
The Co-Chairman is consulted by the RC on matters relating to the other executive directors and key management personnel who report to her on matters relating to the performance of the Company. She duly abstained from participation in discussions and decisions on her own remuneration.
Key management remuneration comprises basic salary and variable bonuses which are based on individual and the performance of the Group as a whole for that year. Key performance indicators that determine performance are different for each key management personnel.
The Company has 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.
LONG TERM INCENTIVE SCHEME
The Company has an employee share award scheme known as the BWI Performance Share Scheme (the “Scheme”), administered by the RC. The Scheme provides an opportunity for employees who met performance targets to receive their bonus through an equity stake in the Company instead of receiving cash, based on the market closing price on the day that the share award vests. The Circular to Shareholders dated 8 April 2009 containing the details of the Scheme is available to shareholders upon their request.
In 2018, 231,600 shares were granted through the use of our treasury shares on 18 April 2018 to employees who opted into the Scheme. No new shares have been issued during the financial year by virtue of the grant of share awards under the Scheme.
The Scheme was at the end of its 10-year duration and was discontinued on 30 April 2019.
Remuneration of non-executive director dependent on contribution, effort, time spent and responsibilities
The non-executive directors are paid director’s fees, consisting of a base fee for their appointment as Board members and additional fees for more responsibilities, such as chairing a board committee or being appointed a member of a board committee or taking up the appointment of Lead Independent Director. Fees are structured taking into account the responsibilities, contribution, effort and time spent by the nonexecutive directors.
The fee structure for FY2023 is as follows:| NEID appointment | Fees | |
|---|---|---|
| Board | Lead Independent Director Member |
4,000 67,000 |
| Nominating Committee (NC) | Chairman Member |
13,000 5,200 |
| Remuneration Committee (RC) | Chairman Member |
13,000 5,200 |
| Audit Committee (AC) | Chairman Member |
16,000 6,400 |
The RC had recommended to the Board an amount of S$280,600 as Directors’ fees to be paid for FY2023 (FY2022: S$245,000), which will be tabled for shareholders’ approval at the forthcoming AGM.
Fees for non-executive independent directors are subject to the approval of shareholders at the AGM.
Corporate Governance Practices of the Company
Remuneration disclosures of directors and key management personnel; Details of employee share schemes
For competitive reasons and difference in salary benchmarks across the countries the Group operates in, the Company discloses the remuneration of individual executive directors and the top five key management personnel on a named basis in bands of S$250,000. The Board’s view is that it is not in the Company’s interest to disclose the exact remuneration of each individual director and the CEO, taking into consideration the highly competitive human resource environment for such personnel, and that such disclosure of specific remuneration information may give rise to recruitment and retention issues. The Company believes that shareholders’ interest will not be prejudiced by the non-disclosure of each individual director’s and the CEO’s individual remuneration.
Please also refer to Provisions 7.1 and 7.2 above for further details on the Company’s policy and criteria for setting remuneration. The Company is of the view that through the disclosures made in the Annual Report, there is sufficient transparency in its practices which are consistent with the intent of Principle 8 of the Code.
| Remuneration Band/Remuneration | Salary(1) (%) | Bonus (%) |
Benefits-in-kind (%) | Fees (%) |
Total (%) |
|
|---|---|---|---|---|---|---|
| Executive Directors | ||||||
| Dora Hoan Beng Mui | $10,750,000 to $11,000,000 | 8 | 91 | 1 | 100 | |
| Doreen Tan Nee Moi | $10,750,000 to $11,000,000 | 8 | 91 | 1 | - | 100 |
| Huang Ban Chin | $6,500,000 to $6,750,000 | 9 | 90 | 1 | - | 100 |
| Independent Directors | ||||||
| Lee Sen Choon | $97,400 | - | - | - | 100 | 100 |
| Adrian Chan Pengee | $91,600 | - | - | - | 100 | 100 |
| Chester Fong Po Wai | $91,600 | - | - | - | 100 | 100 |
| Top Five Key Management Personnel | ||||||
| Jansen Tang | $1,500,000 to $1,750,000 | 13 | 87 | - | - | 100 |
| Simon Yeh | $1,000,000 to $1,250,000 | 19 | 81 | - | - | 100 |
| Jerry Lu | $500,000 to $750,000 | 30 | 70 | - | - | 100 |
| Koh Hui | $500,000 to $750,000 | 48 | 51 | 1 | - | 100 |
| Sugiharto Husin | $250,000 to $500,000 | 46 | 54 | - | - | 100 |
(1) Comprises salary and all CPF contributions
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 FY2023 was S$4,537,823.
Remuneration of employees who are substantial shareholders of the company, or are immediate family members of a director, the CEO or a substantial shareholder of the company
Details of the remuneration of employees who are immediate family member (defined in the Listing Manual as the spouse, child, adopted child, stepchild, brother, sister and parent) of a director, the CEO or a substantial shareholder, in the employment of the Company whose annual remuneration exceeded S$100,000 during FY2023 are disclosed as follows:
| Immediate Family Member of Director | Relationship with Director | Designation | Remuneration Bands |
|---|---|---|---|
| Hoan Beng Hua | Brother of Dora Hoan Beng Mui | Senior Production Supervisor | S$100,000 – S$200,000 |
Details of Employee share schemes
There was no employee share scheme offered by the Company during the year. Disclosure on all forms of remuneration are sufficiently disclosed in this report under Principles 6, 7 and 8 and in the financial statements of the Company and the Group.