33
TELECHOICE INTERNATIONAL LIMITED
2015 ANNUAL REPORT
CORPORATE
GOVERNANCE
B.
Variable Cash Component:
The Variable Cash Component, including the Performance Bonus and the Discretionary Bonus, is a remuneration component
linked to the achievement of annual performance targets for each key management personnel as agreed with the Board at
the beginning of each financial year. Performance objectives aligned to the overall business metrics and strategic goals of
the Company are cascaded down throughout the organisation through the use of Performance Scorecards, thereby creating
greater alignment between the performance of the Company, business units and the individual employees. These performance
objectives could be in the form of both quantitative and qualitative measures which are aligned to the Company’s business
strategy. In determining the final payout for each Key Management Personnel, the RC considers the overall performance of
the Company, funding affordability and individual performance.
C.
Share-Based Component:
The aggregate number of new shares to be issued, when aggregated with existing shares (including treasury shares, if any,
and cash equivalents) delivered and/or to be delivered pursuant to the TeleChoice Restricted Share Plan (the “
TeleChoice RSP
”)
and the TeleChoice Performance Share Plan (the “
TeleChoice PSP
”) (collectively referred to as the “
Share Plans
”) then in force,
shall not exceed fifteen per cent (15%) of the total number of issued shares (excluding treasury shares, if any) from time to
time. To align the interest of the Key Management Personnel and that of shareholders, the Key Management Personnel are
required to retain a certain percentage of shares acquired through the share-based plans, up to the lower of: (1) a percentage
of total number of shares acquired under RSP and PSP Plan for FY07 and onwards based on position level; or (2) the number
of TeleChoice shares to be retained in order to meet the minimum value, which is set at a percentage of annual base salary
based on position level.
Please refer to the section on Equity Compensation Benefits in the Directors’ Statement on pages 48 to 51 of this Annual
Report for the details of the Share Plans as well as awards granted under the Share Plans.
TeleChoice RSP
Under the TeleChoice RSP, conditional awards vest over a two-year period, once the RC is, at its sole discretion, satisfied that
the performance and extended service conditions are attained. The total number of shares to be awarded depends on the level
of attainment of the performance targets. No shares will be delivered if the threshold performance targets are not achieved,
while up to 1.3 times the number of shares that are the subject of the award will be delivered if the stretched performance
targets are met or exceeded. The performance measures used in the TeleChoice RSP grants are Net Profit before Tax and
Return on Capital Employed. The Company has attained an achievement factor which is reflective of partially meeting the
pre-determined target performance levels based on the performance period from FY14 to FY15.
TeleChoice PSP
Under the TeleChoice PSP, conditional awards of shares are granted. Awards represent the right of a participant to receive
fully paid shares upon the participant achieving certain pre-determined performance targets which are set based on corporate
objectives aimed at sustaining longer-term growth. After the awards vest, the shares comprised in the awards are issued at the
end of the performance and/or service period once the RC is, at its sole discretion, satisfied that the prescribed performance
targets have been achieved. The actual number of shares given will depend on the level of achievement of the prescribed
performance targets over the performance period, currently prescribed to be a three-year period. No shares will be delivered
if the threshold performance targets are not achieved, while up to 1.5 times the number of shares that are the subject of
the award will be delivered if the stretched performance targets are met or exceeded. The performance measures used in
the TeleChoice PSP grants are Total Shareholder Return (the “
TSR
”) against Cost of Equity Hurdles (i.e. measure of absolute
performance) and TSR against FTSE ST All-Share Index (i.e. measure of relative performance). The Company has attained
an achievement factor which is reflective of partially meeting the pre-determined target performance levels based on the
performance period from FY13 to FY15.
