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CORDLIFE GROUP LIMITED
| ANNUAL REPORT 2015
CORPORATE GOVERNANCE REPORT
The compensation structure is designed to ensure that the level and mix of remuneration is competitive, relevant
and appropriate in finding a balance between current and long-term compensation. The Company has in place the
following incentive plan in FY2015:
Share Grant Plan
At an Extraordinary General Meeting held on 18 October 2013, the shareholders of the Company approved the
Cordlife Share Grant Plan (the “Plan” or the “SGP”) for the award of rights (the “Awards”) to participants of the Plan to
receive fully-paid ordinary shares, free of charge, upon the participant achieving the prescribed performance targets
and upon expiry of the prescribed vesting period. The RC of the Company has been designated as the Committee
responsible for the administration of the Plan.
The Plan is a performance incentive scheme which forms an integral part of the Group’s incentive compensation
program. Persons eligible to participate in the Plan (the “Participants”) comprise key senior management and
employees of the Company and non-executive Directors at the absolute discretion of the Committee. The Plan is
established with the objective of motivating the Participants to strive towards performance excellence, long term
prosperity of the Group, and promoting their organisational commitment, dedication and loyalty towards the Group.
In addition, the Plan will make employee remuneration sufficiently competitive to recruit new employees and retain
existing employees whose contributions are important to the long term growth and profitability of the Group. The
FY2015 contingent awards under the Plan are granted conditional on meeting performance targets set based on
the following Group corporate objectives measured over a performance period of two financial years:
•
Group’s Average Return on Invested Capital (ROIC); and
•
Group’s Average Absolute Total Shareholder Return (TSR) measured as a multiple of Cost of Equity.
Each of the above objectives has a weightage of 50% towards the final performance achievement computation.
Pursuant to the SGP, the Committee has decided to grant contingent awards on an annual basis, conditional on
meeting targets set for the performance period. The shares will only be released to the recipient at the end of the
performance qualifying period. The actual number of performance shares to be released to the recipient will depend
on the achievement of the set targets over the performance period. A minimum threshold performance is required
for any share to be released and the actual number of performance shares to be released is capped at 200% of the
conditional award. Only 50% of the final number of shares will vest upon the end of the performance period, with
balance of the award vesting at the end of the third year.
In addition, a retention period of at least one year after the vesting date of the share grant will be imposed in
respect of 50% of all shares awarded to the participants under the Plan. The awarded shares may not be transferred
or otherwise disposed of during this retention period.
Except for the SGP, the Board has not introduced any contractual provisions to allow the Company to reclaim
incentive components from its executive Directors and key management personnel in exceptional circumstances
of misstatement of financial results, or of misconduct resulting in financial loss to the Company. The Board believes
that there are ample statutory and regulatory penalties to address such circumstances.
Remuneration of Non-Executive Directors and Independent Directors
The Independent Directors do not have service agreements with the Company. The Independent Directors and
non-executive Directors are paid a basic, fixed Director’s fee, which is determined by the Board, apposite to the
level of their contributions and taking into account factors such as the time spent and the effort and the individual
responsibilities of each independent or non-executive Director. Such fees are subject to the approval of the
shareholders at each AGM.
