The Remuneration Committee
Remuneration Committee Charter (Revision No. 6)
Table of Contents
4. Qualification of the Committee Members
5. Duties and Responsibilities
6. Term of Services and Remuneration
9. Effective Date
PTT Exploration and Production Public Company Limited or PTTEP has a strong determination to conducting business with Good Corporate Governance in order to maintain an appropriate management with a highest effectiveness and efficiency, as well as to increase recognition of the shareholders and stakeholders.
The appointment of the Remuneration Committee is a part of PTTEP’s Good Corporate Governance with the approval of the Shareholders’ Meeting on April 24, 2003. It is an important tool to alleviate the Board and Shareholders’ responsibility by performing duties in recommending guidelines to determine the remuneration package of the Directors, Sub-Committee, Chief Executive Officer and the salary structure of Executives. The remuneration principles are established fairly and decently so as to propose at Shareholders’ Meeting for the Directors and Sub-Committee, and at the Board of Directors’ Meeting for Chief Executive Officer and Executives.
“PTTEP” means PTT Exploration and Production Public Company Limited.
“Board” means Board of Directors of PTT Exploration and Production Public Company Limited.
The Board appoints the Remuneration Committee composed of at least 3 PTTEP Directors, of which the majority of the Committee must be an independent director.
The Board will appoint one independence Committee Member as a Chairman while Head of Corporate Secretary will be appointed as Secretary of the Remuneration Committee.
A Committee Member must possess qualifications according to the criteria as follows:
(1) Being a Director and not a Chairman or Chief Executive Officer of the PTTEP
(2) To give adequate time for the Remuneration Committee’s performance
(3) Independent Committee Member must have qualification according to the definition of independent director as prescribed in Good Corporate Governance of PTTEP.
5. Duties and Responsibilities
The duties and responsibilities of Remuneration Committee Charter are as follows:
(1) To consider remuneration package for Board and Sub Committee with fair and reasonable principles in accordance with work performance, the company's performance, the practices guidelines of the industry, as well as related to the scope of duties and responsibilities. The Remuneration package of the Directors and Sub-Committee must be proposed at the Shareholders’ Meeting for approval.
(2) To consider remuneration package of the President and Chief Executive Officer and salary structure of executives with fair and reasonable principles and propose at the Board Meeting for approval. For consideration of the President and Chief Executive Officer’s remuneration, duties and responsibilities together with annual performance result shall be also taken into account.
(3) To evaluate the performance of Remuneration Committee and report its performance to the Board Meeting and disclose to the shareholders every year.
(4) To review its charter consistently to ensure the appropriateness and update.
(5) To perform any other scope of duties and responsibilities assigned by Board.
In order to perform the duties according to the Article 5, the Remuneration Committee may seek independent opinion from any other professional counselor when it is deemed necessary and proper, including the training and development of the committee members for the knowledge related to the company’s activities. PTTEP is responsible for those expenses.
The Remuneration Committee is responsible directly to the Board according to the duties and responsibilities, while the responsibilities for all activities of PTTEP towards third person are still vested in the entire Board.
6. Term and Remuneration
The term of service of the Committee Member is equivalent to the director’s Board term.
In case of any Committee Member’s vacating from Office or any unavailability before the expiration of his term of service, the Board must appoint another Remuneration Committee Member with is fully qualified to replace the resigning member not later than 3 months as of the date of incomplete composition of the Remuneration Committee.
Upon the expiration of the term of service, if there is no appointment of a new Remuneration Committee Member, the resigning member has to standby to perform the duty until the arrival of a new Remuneration Committee Member.
The resigning Committee Members may be re-appointed for another term.
Besides the vacating from office by expiration of term of service, the Remuneration Committee member has to resign once he/she cannot possess the qualification according to the Article 4.
The remuneration Committee will receive an appropriate remuneration approved by the Shareholders Meeting for his duties and responsibilities and PTTEP has to disclose that remuneration in its annual report too.
The frequency of the meeting is at least twice a year.
The Remuneration Committee fixes the number of members required to attend a meeting to make it valid by not less than a half of the Committee Members. If the Chairman is absent, the attending committee members have to choose on Committee Member as Chairman of the meeting.
The voting in the meeting is exercised by a majority. A Committee Member has a casting vote. If the votes are equal, the Chairman will have an additional vote which becomes final and decisive. The Secretary of the Remuneration Committee has no right to vote.
Any Committee member who has any personal interest or any conflict of interest in a matter being considered must inform the meeting and abstain from expressing an opinion and voting on the issue and leave the meeting room. An exception can be made if the other Committee members vote unanimously to allow such Committee member to stay in the meeting room to provide information on the issue so that the Board can deliberate on the issue thoroughly. However, such Committee member is not allowed to vote or make a decision on the issue.
The Remuneration Committee has an authority to invite the management, or any other concerned parties or other appropriate persons to participate or to explain including an authority to call for a paper of the concerned subjects in the meeting.
The remuneration Committee must report to the Board the result of the meeting or the other necessary reports so the Board is kept regularly informed.
9. Effective Date
This Charter has come into force since 29 November 2018.
PTTEP’s Good Corporate Governance requires the Remuneration Committee to consist of at least three directors where most of the Committee members are independent directors. The Committee’s responsibility is to evaluate an appropriate remuneration for the Board, sub-committees, and the President and Chief Executive Officer (CEO), as well as the salary structure of the Company’s senior executives by adhering to fair and reasonable principles, procedures, and structure.
In 2018, the Remuneration Committee convened 3 times where all of the incumbent members attended every meeting. The duties and responsibilities of the Committee can be summarized as follows:
(1) Considered the performance evaluation and remuneration system of the Company to enhance employees’ capability and to promote the development of high-potential employees to advance and become members of PTTEP’s management by considering the remuneration that reflects the Company’s annual performance and is in line with other companies in the market in order to motivate employees across the organization.
(2) Considered the CEO’s performance appraisal and remuneration based on the assigned duties and responsibilities, benchmarked with those of other companies under PTT Group.
(3) Reviewed the remuneration policy and criteria of the Board and sub-committees on appropriate principles based on their responsibilities and consistent with long-term corporate strategy as well as being comparable to those of other companies in the same industry. Moreover, the Committee took business environment into account in considering appropriate remuneration principles to create incentives for the Board in directing the organization to achieve short and long-term goals together with being adaptive to the changing technology.
The Remuneration Committee performed its roles in a transparent, fair, cautious, and independent manner, while providing straightforward opinions for the best interests of the shareholders and stakeholders according to PTTEP’s Good Corporate Governance and as specified by the Securities and Exchange Commission. The results of all meetings were also regularly reported to the Board for acknowledgement.
(Mr. Achporn Charuchinda)
Chairman of the Remuneration Committee