NTUC Income AR 2017

CORPORATE GOVERNANCE Human Resource & Remuneration Committee The Human Resource & Remuneration Committee (HRRC) comprises five members as follows: Chairman Sung Cheng Chih Members Kee Teck Koon Lau Wing Tat Sim Hwee Hoon Joy Tan The key duties and responsibilities of the HRRC are to: • Review and recommend a framework for determining the remuneration of non-executive directors, external members of Board Committees and the Chief Executive; • Review and approve a framework for determining the remuneration of senior management, based on the factors set out in the prevailing ICGR, including any amendment thereto; • Review and approve the remuneration plans and actual pay-out for senior management, defined as Senior Vice Presidents and above, and for the Chief Executive only, in consultation with the Board Chairman, such that remuneration practices do not create incentives for inappropriate risk-taking behaviour; • Review and approve succession plans for senior management, at least once in every two years; • Review appointments and terminations of senior management; • Establish the selection criteria and appointment for remuneration consultants. The HRRC met five times during the year. The key areas reviewed were the remuneration framework, remuneration of the senior management team, development plans for senior management, alignment to corporate governance and review of the social impact indicators. During the course of the year, the HRRC also conducted interviews of candidates for senior management appointments. The Corporate Governance Guidelines advocate the adoption of the Principles for Sound Compensation Practices and Implementation Standards issued by the Financial Stability Board (FSB) which aim to reduce incentives that encourage excessive risk taking. The HRRC has reviewed the Co-operative’s compensation practices to ensure that compensation is aligned with prudent risk taking, effective supervisory oversight and is market competitive . RELATED PARTY TRANSACTIONS POLICY AND PROCESS The related party transactions policy of the Co-operative provides guidance and direction on the identification of and the approval of related party transactions. The policy prohibits all related party transactions, unless approved or ratified by the Board, or is considered pre-approved as outlined in the policy. On a quarterly basis, the management reports to AC and Board any significant related party transactions identified and these transactions are reviewed at the AC and Board meetings. REMUNERATION POLICY Employees’ Remuneration The Co-operative’s policy is to remunerate its employees at competitive and appropriate levels, commensurate with their performance and contribution. It seeks to attract, motivate, reward and retain quality employees and foster a performance- oriented culture across the organisation. The total compensation package for employees comprises basic salary, fixed and variable bonuses, as well as other staff benefits. The approximate mix of remuneration of fixed and variable is 86%-14% for employees and 80%-20% for managers. For senior management, the approximate mix is about 65%-35%. In addition, a retention plan is provided for eligible senior management members. In order to ensure that its remuneration package is competitive, the Co-operative regularly reviews its base salary ranges and benefits package versus market data. Each job is graded and base salary ranges are established (by using the market median as a midpoint guide) for each respective grade. ANNUAL REPORT 2017 EVERY DAY MADE DIFFERENT 23