MISC Integrated Annual Report 2020

NOMINATION AND REMUNERATION COMMITTEE REPORT iv. Directors’ and Senior Management remuneration The Company’s policy for remunerating its Directors is based on the PETRONAS Public Listed Companies Non-Executive Directors’ Guidelines and Remuneration Package. The fee structure of NEDs of MISC is as follows: Monthly Fees Meeting allowance per attendance Board Board Audit Committee Nomination & Remuneration Committee Board Governance & Risk Committee Chairman RM20,000 RM3,500 RM3,500 RM3,500 RM3,500 Member RM10,000 Independent Non-Executive Directors are entitled to fuel allowance of RM6,000 per annum and Directors’ and Officers’ Insurance coverage of up to RM1.29 billion per occurrence and in the aggregate. 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 272 to 273 of this Integrated 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 and direction. 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 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 categories, i.e. MC 1 (for business segment heads) and MC 2 (for division heads). v. Company and President/Group CEO performance appraisal The Company’s performance against the FY2020 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: • Financial • Strategic Initiatives • Operations • Health, Safety, Security and Environment (HSSE) • People Development Based on the Company’s performance against the FY2020 Balanced Scorecard, the NRC also deliberated on the individual performance of the President/Group CEO of the Company for FY2020 and made the appropriate recommendations to the Board for approval. Overview of the NRC’s activities in 2020 Board membership 1. Considered matters relating to the appointment of Directors. 2. Reviewed the mix of skills, diversity in terms of gender, ethnicity, age, education and business experience as well as other qualities, including core competencies of the Directors. 3. Recommended the Directors who are eligible for re-election and re-appointment at the AGM. Succession planning 1. Interviewed the candidates shortlisted from the Board Search and recommended the appointment of three new INEDs. 2. Reviewed the MISC Board and Board Committees Structure and recommended the establishment of a BGRC, together with its membership, having considered the merits of a standalone board committee (separate from the BAC) to oversee MISC’s risk management framework and policies. 3. Received update on succession planning for MC positions and critical positions. 4. Endorsed the appointment of one new MC member and re-appointment of three MC members. Performance management 1. Reviewed and endorsed the Group’s FY2019 Balanced Scorecard results. 2. Reviewed and endorsed the proposed annual salary increment and performance bonus for Appraisal Year 2019. 3. Reviewed and endorsed the Group’s FY2021 Balanced Scorecard. Board performance evaluation 1. Reviewed the results of the MISC Board and Board Committees performance evaluation for FY2019 based on the Board KPIs for FY2019. 2. Reviewed and endorsed the Board KPIs for FY2021. Training and development Reviewed and endorsed topics for the FY2020 Annual Directors’ Training. Annual reporting Reviewed and endorsed the disclosures in the NRC Report for the 2019 Annual Report. DATUK NASARUDIN MD IDRIS Chairman Nomination and Remuneration Committee /////// Business Review / Leadership / Governance / Financial Statements / Additional Information / MISC Berhad / Integrated Annual Report 2020 9 280 MISC Berhad / Integrated Annual Report 2020 9 281 / Additional Information / Financial Statements / Governance / Leadership / Business Review /////// Section Section