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TEHO INTERNATIONAL INC LTD.
Annual Report 2016
REPORT
OF CORPORATE GOVERNANCE
The RC will continue to review the Company’s obligations arising in the event of termination
of the executive directors and executive officers’ contracts of service, to ensure that such
contracts of service contain fair and reasonable termination clauses which are not overly
generous.
Level and Mix of Remuneration
Principle 8:
The level and structure of remuneration should be aligned with the long-
term interest and risk policies of the company, and should be appropriate to
attract, retain and motivate (a) the directors to provide good stewardship of
the company, and (b) key management personnel to successfully manage the
company. However, companies should avoid paying more than is necessary
for this purpose.
The Company has a remuneration policy for the CEO and COO, which comprises a fixed
component and a variable component. The fixed and variable components are in the form of
a base salary and a variable bonus respectively, which takes into account the performance of
the Company and their performances. The performance-related elements of remuneration
are designed to align the executive directors’ interest with those of shareholders and link
rewards to corporate and individual performance.
In setting remuneration packages, the Company also takes into consideration the
remuneration packages and employment conditions in comparable positions and within the
comparable industry and companies.
Mr Lim See Hoe and Ms Lim Siew Cheng being CEO and COO respectively are remunerated
based on their service agreements with the Company. These service agreements will be
renewed for such period as the Board may decide upon expiry on such terms and conditions
as the parties may agree. The agreements provided for termination by either party upon
giving not less than six months’ notice in writing.
The independent directors do not have service agreements with the Company. They are
paid fixed directors’ fees, which are determined by the Board appropriate to the level of
their contributions, taking into account factors such as the effort and time spent and the
responsibilities of each independent director. The directors’ fees are subject to approval by
shareholders at each AGM. The independent directors do not receive any other remuneration
from the Company.
The review of the remuneration of the key executives takes into consideration the
performance and contributions of the staff to the Group and gives due regard to the
financial and business performance of the Group. The Group seeks to offer a competitive
level of remuneration to attract, motivate and retain senior management of the required
competency to run the Group successfully.
The Company has adopted a long-term employee incentive scheme known as TEHO PSP
that was approved by shareholders at the extraordinary general meeting held on 25
November 2011, to align itself with and embrace local trends and best practices in employee
compensation and retention. The TEHO PSP aims to promote higher performance goals,
recognise exceptional achievement and retain talents within the Group. The TEHO PSP is
administrated by the RC. Please refer to the “Directors’ Statement” section of this annual
report for more information of the TEHO PSP. No award was granted pursuant to the TEHO
PSP during FY2016.
Disclosure on Remuneration
Principle 9:
Every company should provide clear disclosure of its remuneration policies,
level and mix of remuneration, and the procedure for setting remuneration,
in the company’s annual report. It should provide disclosure in relation to
its remuneration policies to enable investors to understand the link between
remuneration paid to directors and key management personnel, and
performance.
The Board supports and is keenly aware of the need for transparency. In the interest of
maintaining good morale and strong spirit of teamwork within the Group, the Board has
weighed the advantages and disadvantages ofthe full disclosure relating to the remuneration
of directors, and key executive officers of the Group (who are not directors of the Company)
for FY2016 and believe that such disclosure may be prejudicial to its business interest,
having taken into consideration the sensitive nature of the matter, the relative size of the
Group, and the competitive business environment the Group operates in. Key information
regarding the directors, and key executive officers is set out in the “Board of Directors”, and
“Executive Officers” sections of this annual report respectively.
