CORPORATE GOVERNANCE REPORT
31
Variable Bonus
Variable bonus incentivizes performance and rewards achievements. The variable bonus is linked to the Group and entity financial
results and performance. The amount of this remuneration is subject to achieving specific quantifiable targets as follows :
•
EBITDA of the year of the Group;
•
EBITDA/Operating profit of the individual entity that the key management staff are attached to;
•
Sales Quota and new projects won for Business Development Directors of their existing or new accounts developed; and
•
The current order books and global economic situations which may adversely affect the financial performance of the
current year.
The CEO and his Internal Remuneration Committee established a budget each year to be set aside for the variable bonus for the
approval of the Board’s Remuneration Committee.
The amounts to be given to the individuals are based on the guidelines set in accordance with the degree of fulfilment of the individual
targets set with the CEO and the contributions of the individuals. The target parameters include EBITDA, operating profit and sale
quota, etc. In the case of CEO, the targets are agreed with the Chairman of the Board of Directors.
In general, the total amount of annual fixed variable bonus is in the range of up to 20% of the total remunerations calculated on the
basis of the latest fixed basic salary.
The variable bonus is paid out annually after the adoption of the Group’s annual performance results for the relevant financial year.
No pay out will be made if the defined minimum acceptable performance level is not achieved.
Restricted Share Plan (“RSP”)
All employees and full-time executive directors are potentially eligible. However, participation will be determined by the CEO
and the Remuneration Committee. All such determinations are made in accordance with the terms and conditions of the Restricted
Shares Plan.
The objective of this award is primarily to recognize and reward the members of key management and staff who have contributed
significantly to the growth and financial performance of the Company in the past one year. The Committee may also offer such grants
to attract talents to join the organization, if necessary. This is also to partly link the remuneration of the participants to the shareholders’
gain and loss in value to strengthen the common interest between the key management and the shareholders of Sunningdale Tech
for the long-term growth of the Group.
It is also a tool for staff retention as this restricted share plan is tied to a three-year vesting period. i.e., one-third of the amount will
vest on the first anniversary, another one-third of the amount will vest on the second anniversary and the last one-third on the third
anniversary of the grant. All shares, however, will deliver only on the third anniversary, i.e., there is compulsory holding period for each
of the first two vested tranches. This assumes that the employee remains in Sunningdale Tech employ on the third anniversary.
For employees who resign, retire, are retrenched due to company restructuring or downsizing before the 3
rd
anniversary, the allotted
quantum may be adjusted but may still be awarded subject to the conditions sets.
For each fiscal year, about 1% of the total issued share capital is set aside to be distributed to all eligible employees. The actual amount
is decided on a yearly basis.
The annual review of the compensation of Directors is carried out by the
RC
to ensure that the remuneration of the Executive Directors
is commensurate with their performance, giving due regard to the financial and commercial health and business needs of the Group.
The performance of the CEO is reviewed periodically by the RC and the Board.
The
RC
administers the Sunningdale Restricted Share Plan 2014 and Sunningdale Performance Share Plan 2014.
