Remuneration Policy for Board, Committees and Executives

Remuneration Policy for Board, Committees and Executives 

DISCLAIMER:
This English version of this policy is a translation of the original Arabic document and has been made for information purpose for Non-Arabic speakers. In case of any discrepancy or misinterpretation, the original Arabic document of the said policy shall prevail.

1. Introduction
2. Purpose
3. General Standards for remuneration
4. The Board Members Remuneration
5. The Committees’ Members Remuneration
6. Executive Management’s Remuneration
7. Additional guidelines for remuneration and payment process
8. Breakdown of Board Members and it committees remuneration
9. Final Provisions (for publications, Access and Amendments)

1) Introduction

The "Remuneration Policy for Board, Committees and Executive Management of Savola Group (Savola or the Company)” was been prepared to comply with item (1) of article (61) of the CG Regulations issued by the Capital Market Authority (CMA) Board pursuant to Decision No. (8-16-2017) Dated 13/2/2017, which stipulated that the Remuneration and Nomination Committee (RNC) shall “prepare a clear policy for the remunerations of the board members and its committees and the Executive Management, and presenting such policy to the board in preparation for approval by the General Assembly".

2) Purpose

The purpose of this policy is to stipulate and clearly outline the remuneration for the Board of Directors and its committee members and Executive Management in light of the Companies law requirements and CMA laws and regulations. In addition, this policy aims to attract talented professionals to work in Savola Group (Savola or the Company) board, its committees, and Executive Management through adapting performance-related motivational plans and programs for remuneration, which contributes to improve the performance of the company and to achieve the best interests of its shareholders.

3) General Standards for remuneration

The RNC committee responsibilities include recommending to the board the remuneration of the board, its committees, and the executive management in accordance with the approved criteria, as follows: 

1. Be proportionate to Savola’s activities and the required skills for its management;
2. The variable part of the remuneration shall be linked to the long-term performance;
3. Remuneration shall be consistent with the strategy, objectives, the magnitude, nature and level of risks faced by Savola;
4. Benchmarking shall be used to take into consideration the remuneration practices of other companies. The disadvantages of such comparisons in leading to unjustifiable increases in remunerations and compensations shall be avoided;
5. Shall be prepared in coordination with the RNC committee with respect to new appointments;
6. Remuneration shall be based on job level, duties and responsibilities, educational qualifications, practical experience, skills and level of performance;
7. Be fair and proportionate to the board or committees member’s activities carried out and responsibilities borne by the board or committees members, in addition to the objectives set out by the board to be achieved during the financial year;
8. Take into consideration the sector in which Savola operates, its size and experience of its board members;
9. Be reasonably sufficient to attract and retain highly qualified and experienced board members; and
10. The remunerations of different board members may vary depending on the board members’ experience, expertise, duties he/she undertakes, and independence and number of board meetings he/she attended in addition to other considerations.
11. The remuneration shall be suspended if it has been determined that such remuneration was based on inaccurate information provided by a member of the board or the executive management.
12. If the company developed a program to grant some of its shares to board members, Executive management and employees, whether a new issue or shares purchased by the company, the RNC committee shall supervise this program in light of the company's bylaws and the relevant CMA laws and regulations.

4) The Board Members Remuneration

1. The remuneration of Savola board members may consist of a specified sum; an attendance fee; expense fees; other in-kind benefits; a certain percentage of the net profits; or a combination of two or more of those benefits. In no event, the remuneration of a board member shall not exceed the limit stated in the Companies Law and shall be in line with the table stipulated herein and any amendments may take place in the future to be approved in line with relevant regulations.
2. The remuneration of the various board members may vary in light of the policy recommended by the RNC committee and approved by the GA. The Annual Directors’ report to the GA shall include a comprehensive statement of all the amounts received by each board member during the fiscal year including remunerations, allowances, expenses, and other benefits, as well as all the amounts received by the members in their capacity as employees or executives, or in consideration of such technical, administrative, or advisory services (if any). Such a report shall also include a statement of the number of the board meetings held and the number of meetings attended by each member beginning from the date of the last meeting of the GA.
3. Where the remuneration represents a certain percentage of Savola’s profits, provisions of article (76) item No. (2) of the Saudi Companies’ Law shall be taken into consideration in addition to article (45) of Savola’s bylaw. In no event, may the total amount of any compensation and remuneration whether it being cash or in kind benefits received by a board member be greater than SAR (500,000) Five Hundred Thousand Saudi Riyals annually.
4. The remuneration of independent board members shall not be a percentage of the profits that are realized by Savola, nor shall it be based directly or indirectly on Savola’s profitability.

5) The Committees’ Members Remuneration

1. The board shall determine and approve its committee’s remuneration –excluding the Audit committee remuneration-, attendance fees and other benefits based on the RNC committee recommendation.
2. Committee member remuneration shall comprise of an annual remuneration (a  lump sum) and attendance fees, and other benefits as defined in this policy.
3. However, Audit committee members’ remuneration shall be determined by the GA based on the board’s recommendation as per the regulations.
4. When forming any Board’s Committee, the number of seats that occupied by each Board member, shall be taken into consideration as the total amount paid for his/her membership on both board and committees, shall not exceed the statuary limit defined in the companies’ law.

6) Executive Management’s Remuneration

The RNC committee shall review and approve the salary scale and the incentive scheme for all employees and executive management, on a regular basis, based on the management recommendations and the executive management remuneration includes:

• Basic salary (to be paid on a monthly basis at the end of each Gregorian month)
• Allowances that include for example (and no limited to) housing, transportation, children education/schools fees, and phone allowances.
• Medical insurance benefits for all employees and executive management   and  their families.
• Life insurance policy (including events of partial or permanent disability, and death at workplace).
• Annual bonus based on KPIs/SMART associated with individual annual appraisal evaluation.
• short-term incentive plans linked with extraordinary/exceptional   performance and long-term incentive  plans such as stock option programs (whenever exists);
• Other benefits included, but are not limited to, annual leave, annual air tickets, executive airport services, and end of service benefits according to labor law and HR policies adopted by the company.
• Executive management team’s compensation plans, programs, and general guidelines shall be approved by the RNC Committee.
• The CEO implements the remuneration policy for all employees and executive management in light of the plans, programs and general guidelines approved by the RNC committee.

7) Additional guidelines for remuneration and payment process

1. Board members shall not vote on the agenda item relating to the remuneration of board members at the GA meeting.
2. Disclosing the remuneration of the board, its committee members and executive management in the annual directors’ report in line with applicable laws and regulations.
3. Members are entitled to the remuneration from the date they have joined the board or committee and as per the duration of their membership.
4. Processing of board and committee member remuneration payment shall be prepared by the board secretary and payment order shall be approved by the CEO.
5. The payment for Group board meeting attendance fees, committee’s remuneration and committee’s meeting attendance fees can be processed as installments on a quarterly basis, whereas the Group annual remuneration of the board shall be paid in full after Annual General Assembly meeting approval.

8) Breakdown of Board Members and it committees remuneration

1) Board members

2) Committee Members

3) Other Non-Cash Benefits

9) Final Provisions (for publications, Access and Amendments)

This policy shall be implemented and complied with by the Company starting from the date it is approved by the GA. This policy shall be published and made available to the shareholder and the public in the Company’s website after GA meeting approval. The content of this policy shall be reviewed - as needed - by the RNC committee, provided that, any recommended changes are presented by the board to the GA in the next meeting for approval.

Note:

This policy was approved by the Shareholders General Assembly in its meeting held on 02/11/2017 corresponding to 13/02/1439