MISC Annual Report 2018

1. Directors’ and Senior Management Remuneration The Company’s policy for remunerating its Directors is based on the PETRONAS Public Listed Companies Non-Executive Directors’ Remuneration Guidelines and Package. The fee structure of NEDs of MISC is as follows: Monthly Fees Meeting allowance per attendance Board Board Audit & Risk Committee Nomination & Remuneration Committee Chairman RM20,000 RM3,500 RM3,500 RM3,500 Member RM10,000 Independent Non-Executive Directors are entitled to fuel allowance of RM6,000 per annum The fees and allowances for NEDs are determined by the Board and are subject to the approval of the shareholders of MISC. The breakdown of the detailed Directors’ fees paid during the year under review is disclosed in the Corporate Governance Overview Statement on pages 168 to 178 of this Annual Report. The Directors’ fees and meeting allowances for NINEDs who are employees of PETRONAS are paid directly to PETRONAS. The presence and participation of the NINEDs who are employees of PETRONAS give the Board a deeper insight into PETRONAS’ operations. The remuneration package for the Executive Director of MISC is balanced between fixed and performance-linked elements. A portion of the Executive Director’s remuneration package is variable in nature and is Key Performance Indicator (KPI) based, which includes the Group’s performance. As an Executive Director, he is not entitled to receive Directors’ fees or meeting allowance. The MC members’ remuneration is based on salary bands reflective of industry standards and categorised into two (2) categories, i.e. MC 1 (for business heads) and MC 2 (for service unit heads). 2. Company and President/Group CEO Performance Appraisal The Company’s performance against the FY2018 Balanced Scorecard was deliberated by the NRC. The performance appraisal covered the following Scorecard dimensions, whereby specific ratings were given to each dimension based on “Minimum”, “Base” or “Stretch” achievements: • Financials • Strategic Initiatives • Operations • Health, Safety and Environment (HSE) • People Development Based on the Company’s performance against the FY2018 Balanced Scorecard, the NRC also deliberated on the individual performance of the President/Group CEO of the Company for FY2018, and made the appropriate recommendations to the Board for further deliberation. OVERVIEW OF THE NRC’S ACTIVITIES IN RESPECT OF FY2018 Board Membership 1. Reviewed the mix of skills, diversity in terms of gender, ethnicity, age, education and business experience as well as other qualities, includ- ing core competencies of the Directors. 2. Recommended the Directors who are eligible for re-election and re-appointment at the AGM. 3. Conducted search and endorsed the appointment of 2 new Directors. 4. Endorsed the amendments to the Board Charter, including the limit on tenure of INEDs to 9 years and Board Diversity Policy. Succession Planning 1. Reviewed and endorsed the improvements to the Succession Planning Approach and Process. 2. Received update on Succession Planning for MC Positions. 3. Endorsed the appointment of 3 new MC members and extension of contract for 3 MC members, including the President/Group CEO. Performance Management 1. Reviewed the MISC Group FY2018 Balanced Scorecard Results. 2. Reviewed and endorsed the proposed Annual Salary Increment and Performance Bonus for Appraisal Year 2018. 3. Reviewed and endorsed the MISC Group FY2019 Balanced Scorecard. Board Performance Evaluation 1. Endorsed engagement of independent consultant to conduct the FY2018 Board Performance Evaluation. 2. Reviewed and endorsed the Board KPIs for FY2019. Training and Development Reviewed and endorsed topics for FY2018 Annual Directors Training Annual Reporting Reviewed and endorsed the disclosures in the NRC Report in respect of FY2018 for inclusion in the 2018 Annual Report. DATUK NASARUDIN MD IDRIS Chairman Nomination and Remuneration Committee NOMINATION & REMUNERATION COMMITTEE REPORT HIGHLIGHTS OF THE YEAR OUR BUSINESS OUR LEADERSHIP OUR PERFORMANCE OUR COMMITMENT TO SUSTAINABILITY OUR GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 50 TH ANNUAL GENERAL MEETING 185 MISC BERHAD ANNUAL REPORT 2018 184