Corporate
Governance Report
In the RC meeting held in February 2016, the RC had reviewed the compensation structure for the Directors, as well as the compensation
structure and package for the key management of RHT TM respectively. Under RHT TM’s compensation structure for its Directors,
Executive Directors are not be paid any Director’s fee, while Non-Executive Directors are paid a base fee which is a fixed amount, with
a variable fee for every additional role which each Director may take on. This serves to compensate the Directors according to the
amount of responsibility, time and effort required of that role. In general, the Chairman of the Board Committees is paid higher variable
fees compared to that of members of the Committees. The remuneration framework for the non-Executive Directors is as shown in the
following table.
Fee
Base Fee
Variable Fee
Executive Director
Nil
Nil
Non-Executive
Director
Base Fee (BF) p.a.
Chairman
Member of Committee
50% of BF as Chairman of Board/ARMC
15% of Base Fee
25% of BF as Chairman of RC/NC
Non-Executive Directors’ fees are benchmarked against the market and industry levels to ensure that the amounts are sufficient to motivate
and attract Directors, without being too generous to pose a potential compromise of the independence of the Directors. The remuneration
that is paid to the Directors of RHT TM are determined and paid from RHT TM (in its personal capacity) as approved by its shareholder Stellant,
and not out of RHT Trust property. Directors’ fees paid to each of the following non-Executive Directors for FY2016 did not exceed S$250,000:
Mr Eng Meng Leong;
Mr Sydney Michael Hwang;
Dr Yogendra Nath Mathur; and
Mr Peter Joseph Seymour Rowe.
Once a year, a review would be carried out of the remuneration framework and the amounts paid to key management of RHT and RHT TM.
The Trustee-Manager has put in place a performance based remuneration framework for its key management. Currently, the key management
of RHT TM, including the Chief Executive Officer (“CEO”), are paid a fixed yearly salary with a performance related bonus that is tied to the
performance of RHT TM. The performance of RHT TM is in turn linked to the performance of RHT. The main regular source of revenue earned
by RHT TM is from the fees paid from RHT to RHT TM. The fees payable by RHT to RHT TM are based on (i) the value of the assets under
management at RHT and (ii) the amount of distributable income generated at RHT. The greater the growth of the value of RHT’s assets and
the amount of distributable income available for unitholders of RHT, will result in higher revenue for RHT TM. The Trustee-Manager has
also elected for the variable bonus to make up a higher proportion of the total salary payable to key employees, in order to tighten the link
between the performance of the individual and their remuneration.
To assist the RC in their assessment on the appropriate compensation level for key management, a report is commissioned yearly to provide
information on the remuneration paid by comparable peers in the industry. Similar to the Directors, key management and employees of RHT
TM are paid by the Trustee-Manager and not out of RHT Trust property. In FY2016, the management of RHT TM had disposed of their shares
in the RHT TMwhich were granted pursuant to a Management Incentivisation Plan (the “MIP”). The disposal of the management’s MIP shares
took place alongside the sale of the remaining issued and paid up share capital of RHT TM from RGAM Investment Advisors Private Limited
to Stellant Capital Advisory Services Private Limited (“Stellant”) on 2 February 2016. The MIP was terminated post the sale of RHT TM to
Stellant. Currently there is no other share incentive or employee share option scheme in place for the management.
No Director or employee of RHT TM is paid in the form of shares or interests in the Trustee Manager’s controlling shareholder or its
related entities.
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Religare Health Trust
