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Remuneration Committee

Banking (Corporate Governance) Regulations 2005

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—(1) Subject to paragraphs (2), (5) and (6) and regulations 8(3) and 22, a bank incorporated in Singapore shall have a Remuneration Committee comprising —(a)at least 3 members of the board of directors of the bank; and(b)at least a majority of directors (including the chairman of the Remuneration Committee) who are independent directors.(2) Where a single substantial shareholder holds 50% or more of the share capital or the voting power in a bank incorporated in Singapore, paragraph (1)(b) shall not apply to the bank only if the bank has a Remuneration Committee comprising —(a)at least a majority of directors who are independent from management and business relationships with the bank; and(b)at least one-third of directors (including the chairman of the Remuneration Committee) who are independent directors.(3) In addition to such other responsibilities as may be determined by the board of directors of a bank incorporated in Singapore, the Remuneration Committee of the bank shall be responsible for —(a)recommending a framework for determining the remuneration of the directors of the bank;(b)recommending a framework for determining the remuneration of the executive officers of the bank which shall include the following elements and factors in the design and operation of the framework:(i)the remuneration package of each executive officer of the bank —(A)shall be aligned to the specific job functions undertaken by the executive officer and where the executive officer undertakes any of the bank’s control job functions, the remuneration package of that executive officer shall be determined independently of the business functions of the bank;(B)shall take into account input from the bank’s control job functions as may be relevant to the specific job function undertaken by the executive officer;(C)shall be aligned with the risks that the bank undertakes in its business that is relevant to the specific job function undertaken by the executive officer;(D)shall be sensitive to the time horizon of risks that the bank is exposed to which includes ensuring that variable compensation payments shall not be finalised over short periods of time when risks are realised over long periods of time;(E)shall, in relation to the quantum of bonus payable to the executive officer, be linked to his personal performance, the performance of his specific job function as a whole and the overall performance of the bank; and(F)shall, in relation to the rationale for the mix of cash, equity and other forms of incentives, be justified; and(ii)the size of the bonus pool of the bank shall be linked to the overall performance of the bank;(c)recommending the remuneration of each director and executive officer of the bank based on the frameworks referred to in sub-paragraphs (a) and (b), respectively; and(d)reviewing, at least once in each year, the remuneration practices of the bank to ensure that they are aligned with the recommendations made in accordance with sub-paragraphs (a), (b) and (c).(3A) In paragraph (3) —“business functions” means the job functions in the bank that conduct risk-taking activities in relation to the business of the bank;“control job functions” means the following job functions: (a)risk control and management;(b)finance;(c)compliance;(d)internal audit; (e)human resources; and(f)risk control related back office operations.(4) The Remuneration Committee shall maintain records of all its meetings. (5) If a member of the Remuneration Committee resigns, ceases to be a director or for any other reason ceases to be a member of the Remuneration Committee —(a)the bank shall notify the Authority of the event within 14 days after the occurrence of the event; and(b)if this results in a breach of any requirement under paragraph (1), the board of directors shall, within 3 months after that event, appoint such number of new members as may be necessary to rectify the composition of the Remuneration Committee in accordance with that requirement.(6) Where before 9th December 2010, a bank incorporated in Singapore has appointed, as the chairman of its Remuneration Committee, any person who is not an independent director, the bank shall not be prohibited from re-appointing that person as chairman of the Remuneration Committee immediately upon the expiry of the earlier term of appointment.(7) Any bank which contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000 and, in the case of a continuing offence, to a further fine not exceeding $2,500 for every day or part thereof during which the offence continues after conviction.(8) Any bank which contravenes paragraph (5)(a) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000.

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