Singapore legislation
Regulation 13
Regulation 13
Remuneration Committee
Subregulation 1
Subject to paragraphs (3) and (7) and regulations 5(3) and 19, a regulated institution must have a Remuneration Committee comprising —
at least 3 directors of the regulated institution, all of whom satisfy the requirement in paragraph (2); and
at least a majority of directors (including the chairperson of the Remuneration Committee) who are independent directors.
Subregulation 2
The requirement is that —
the matters mentioned in regulation 3(3)(c), (d) and (e) do not apply to him or her; or
if any matter mentioned in regulation 3(3)(c), (d) or (e) applies to him or her —
the Nominating Committee of the regulated institution has determined under regulation 5(1) that he or she is nonetheless considered independent from business relationships with the regulated institution; and
the Authority has not given a direction under regulation 5(2) in relation to his or her appointment to the Remuneration Committee.
Subregulation 3
Where a single substantial shareholder holds 50% or more of the share capital or the voting power in a regulated institution, paragraph (1)(b) does not apply to the regulated institution only if the regulated institution has a Remuneration Committee comprising —
at least a majority of directors who are independent from management and business relationships with the regulated institution; and
at least one‑third of its directors (including the chairperson of the Remuneration Committee) who are independent directors.
Subregulation 4
In addition to such other responsibilities as may be determined by the board of directors of a regulated institution, the Remuneration Committee of the regulated institution is responsible for —
recommending a framework for determining the remuneration of directors of the regulated institution;
recommending a framework for determining the remuneration of the executive officers of the regulated institution which must include the following elements and factors in the design and operation of the framework:
the remuneration package of each executive officer of the regulated institution —
must be aligned to the specific job function undertaken by the executive officer and, where the executive officer undertakes any of the regulated institution’s control job functions, the remuneration package of that executive officer must be determined independently of the business functions of the regulated institution;
must take into account input from the regulated institution’s control job functions as may be relevant to the specific job function undertaken by the executive officer;
must be aligned with the risks that the regulated institution undertakes in its business that is relevant to the specific job function undertaken by the executive officer;
must be sensitive to the time horizon of risks that the regulated institution is exposed to, which includes ensuring that variable compensation payments must not be finalised over short periods of time when risks are realised over long periods of time;
must, in relation to the quantum of bonus payable to the executive officer, be linked to his or her personal performance, the performance of his or her specific job function as a whole and the overall performance of the regulated institution; and
must, in relation to the rationale for the mix of cash, equity and other forms of incentives, be justified;
the size of the bonus pool in respect of the executive officers of the regulated institution must be linked to the overall performance of the regulated institution;
recommending the remuneration of each director and executive officer of the regulated institution based on the frameworks mentioned in sub‑paragraphs (a) and (b), respectively; and
reviewing, at least once in each year, the remuneration practices of the regulated institution to ensure that they are aligned with the recommendations made in accordance with sub‑paragraphs (a), (b) and (c).
Subregulation 5
In paragraph (4) —
Definition
“business functions” means the job functions of the regulated institution that conduct for‑profit activities in relation to the business of the regulated institution, but does not include control job functions;
Definition
“control job functions” means the following job functions of the regulated institution:
risk control and management, including risk management, compliance and internal audit;
operations and technology;
in the case of a regulated institution that is an approved exchange or an approved clearing house — regulatory functions to oversee compliance of members, participants, or issuers (as the case may be) with the rules or obligations set by the regulated institution, and to manage any perceived or actual conflicts of interest arising from the regulatory and commercial functions of the regulatory institution;
support functions, including finance and human resources.
Subregulation 6
The Remuneration Committee must maintain records of all its meetings.
Subregulation 7
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 —
the regulated institution must notify the Authority of the event within 14 days after the occurrence of the event; and
if this results in a breach of any requirement under paragraph (1), the board of directors must, within 3 months of that event, take such steps as may be necessary to rectify the composition of the Remuneration Committee in accordance with that requirement.