The Nominating and Remuneration Committee
Nominating and Remuneration Committee Charter
Table of Contents
4. Qualifications of the Committee Members
5. Duties and Responsibilities
6. Term of Service and Remuneration
9. Effective date
PTT Exploration and Production Public Company Limited (PTTEP) is determined to preserve an appropriately effective and efficient management structure, one that ensures PTTEP continues to be regarded as a Company with Good Corporate Governance by its shareholders and stakeholders.
The organizing of the Nominating and Remuneration Committee is a part of PTTEP’s Good Corporate Governance effort, which was approved by the Shareholders’ Meeting on 17 June 2020. This committee serves as an important tool to alleviate the Board’s and shareholders’ responsibility by helping to select appropriate candidates to be appointed as new Directors or President and Chief Executive Officer and to propose nominations to the Shareholders’ Meeting or Board of Directors’ Meeting, depending on the case, for further consideration. The Committee will formulate a transparent and standard selection process. The Committee also recommends guidelines to determine the remuneration package of the Directors, Sub-Committee, President and 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 President and Chief Executive Officer and Executives.
In this Charter;
“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 Nominating and Remuneration Committee to compose of at least 3 PTTEP Directors, of which the majority of the Committee must be an independent director.
The Board will appoint one committee member who is independent director as the Chairman while the Head of the Corporate Secretary unit will be appointed as the Secretary of the Nominating and Remuneration Committee.
4. Qualifications of the Committee Members
All committee members must qualify in accordance with the following criteria:
(1) Being a Director and not PTTEP Chairman of the Board or President and Chief Executive Officer
(2) Contribute adequate time to complete the Nominating and Remuneration Committee’s duties
(3) Independent directors should possess independence qualifications as defined in Good Corporate Governance of PTTEP.
5. Duties and Responsibilities
The Nominating and Remuneration Committee has the duties and responsibilities as follows:
(1) To select and nominate the name of individuals qualified to be Director, President and Chief Executive Officer when there is a vacancy or to replace those whose term have expired, or Acting President and Chief Executive Officer when there is a vacancy and the nomination process is still under consideration, for election by the Board of Directors or by the shareholders in consideration with the Board composition, knowledge and capability and their experiences which is useful to PTTEP, the number of company they serve as a director, and their conflict of interest.
(2) To consider the President and Chief Executive Officer’s succession plan and appropriate executive-level management’s development system to ensure candidate list with skills and qualifications in accordance to PTTEP’s target growth.
(3) To consider Skill Mix qualifications and prepare list of possible nominee directors, President and Chief Executive Officer, or Acting President and Chief Executive Officer in advance and/or when there is a director or President and Chief Executive Officer vacancy and submit it for consideration to the Board’s or the Shareholders’ meetings, depending on the case.
(4) To consider annual Performance Target of the Board and annual Performance Agreement of the President and Chief Executive Officer and propose to the Board for consideration; and to set the Performance Evaluation Form of the Board, Chairman, Director, Sub-Committees and President and Chief Executive Officer.
(5) To consider and propose qualified Directors to be a member and a chairman of a Sub-Committee to the Board for consideration when there is a vacancy or propose the restructuring of Sub-Committee to the Board for consideration as deem appropriate.
(6) To consider organization restructuring to support the Company’s growth and changing business environment.
(7) 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.
(8) 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.
(9) To evaluate the performance of the Nominating and Remuneration Committee and report its performance to the Board Meeting and disclose to the shareholders every year.
(10) To review this charter regularly for its appropriateness and up to date.
(11) To perform other duties as may be assigned by the Board.
Sub-Committees in (4) and (5) mean PTTEP directors who have been appointed as Standing Sub-Committees according to PTTEP Articles of Association.
In order to perform its duties in accordance with Article 5, the Nominating and Remuneration Committee may seek independent opinion from other professional sources when it is deemed necessary, including in matters concerning the training and development of the committee members regarding necessary background related to the company’s activities. PTTEP will be responsible for these expenses.
The Nominating and Remuneration Committee is directly responsible to the Board, while the responsibilities for all activities of PTTEP towards third persons are still vested in the entire Board.
6. Term of Service and Remuneration
The term of service of the Committee members is equivalent to the director’s Board term.
If any Committee member vacates his office or is unavailable before the expiration of his term of service, the Board must appoint another Committee member, who is fully qualified, to fill the vacancy not later than 3 months as of the date of the incomplete composition of the Nominating and Remuneration Committee.
Upon the expiration of the term of service, if there is no appointment of a new Nominating and Remuneration Committee member, the original member has to resume the position to perform his duties until a new Committee member replaces him.
The retired Committee members may be re-appointed for another term.
Besides vacating office because of expiration of term of service, the Nominating and Remuneration Committee members must resign once they no longer possess qualifications as specified in Article 4.
Nominating and Remuneration Committee members will receive appropriate remuneration as approved at the Shareholders’ Meeting for their duties and responsibilities. PTTEP is required to disclose thus remuneration in its annual report as well.
The Nominating and Remuneration Committee will meet at least twice a year.
The quorum for a Committee meeting may not be less than half of the total number of Committee members. If the Chairman is absent, meeting members must select one Committee member to serve as Chairman for the meeting.
Meeting resolutions will be on majority vote. Each Committee member has one vote. If voting results in a tie, the Chairman will have the casting vote, to resolve the issue. The Committee secretary cannot 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 decision on the issue.
The Nominating and Remuneration Committee may invite management or parties to clarify any pertinent matters and has the power to request for the relevant documents.
The Nominating and Remuneration Committee must report to the Board the results of their meetings or forward any reports generated, so that the Board is kept regularly informed.
9. Effective Date
This Charter has taken effect on 27 August 2020.
In 2020, PTTEP considered the merger of the Nominating Committee and the Remuneration Committee because of its related duties, i.e. nomination of Directors, Sub-Committees and CEO and consider their appropriate remuneration, consider Board, Sub-Committees and Chairman’s performance assessment, develop executive succession plan and organization’s salary structure. The merger was approved by the Shareholders at the Annual General Shareholders’ Meeting on June 17, 2020.
PTTEP still focuses on the Execute and Expand business strategy with the aim to achieve its goals and target workplan particularly the transition of operations of newly acquired projects, review investment plan according to low oil price situation, create value added from current projects as well as expand investment opportunities in both E&P related business and new business for Company’s sustainable growth. The Nominating and Remuneration Committee has hence been focusing on organization readiness, organization restructuring, development of executives’ competencies, and nomination of Company’s leaders by developing executive succession plan. Also, the Committee has been nominating directors who are qualified, knowledgeable, and experienced fitting its core business to provide long-term competitiveness.
The Nominating and Remuneration Committee convened 8 times in 2020, summarized as follows:
(1) Considered the principles for 2020 Board Performance Target in which the Board shall focus on monitoring and providing feedbacks to the management to best achieve PTTEP’s Corporate Key Performance Index (Corporate KPIs) as well as measuring the stakeholders’ perspectives towards the Company including the Corporate Governance Report of Thai listed companies (CGR) and criteria and requirements of Dow Jones Sustainability Indices (DJSI).
(2) Set Target Skill Mix of the nominees in replacement of the directors who are due to retire by rotation in 2021 in the areas of International Market, Organization Change and Development, and Legal to accommodate investment expansion in new business, develop full potential in commercial and marketing especially for international projects, prepare organization readiness for newly acquired projects’ operatorship transfer, set internal control and reporting systems between PTTEP and its subsidiaries and manage human resources internationally in order to promote PTTEP to be a multinational company.
(3) Nominated to the Board of Directors suitable candidates with appropriate Skill Mix for consideration on election of directors and sub-committee members when positions were vacated, with due consideration for Board composition, competency, experiences that useful to PTTEP, the number of companies they were serving, and potential conflicts of interest. Also, it reviewed the principles allowing shareholders to nominate qualified director nominees in accordance to the Company’s Target Skill Mix for considerations by the Board of Directors and consequently the Annual General Shareholders’ Meeting so that major and minor shareholders are treated fairly and suitably.
(4) Considered the Board, Sub-Committees and Chairman’s performance assessment and report the result of the assessment to the Board of Directors.
(5) Considered the qualifications and selection process for qualified candidates to be the Company’s leader and developed appropriate executives succession plan to accommodate organization’s growth and to be aligned with business environment both short and long terms. Also, considered the CEO’s performance appraisal and remuneration.
(6) Screened and commented to the Board of Directors on organization restructuring and work process to support long-term corporate growth.
(7) Reviewed the remuneration policy and organization’s salary structure based on the same industry in order to maintain competitiveness and attract high-potential of both Thais and foreigners to join the Company to support the Execute and Expand strategy to be accomplished.
(8) Reviewed the remuneration policy and criteria for 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 other companies in the same industry. Moreover, the Committee took business environment into account in considering appropriate remuneration to create incentives for the Board to direct the organization to achieve its short and long-term goals together with being adaptive to the changing technology.
The Nominating and Remuneration Committee prudently and freely executed their duties to the best of their ability by providing comments for the best interest of all shareholders and stakeholders. The results of all meetings were regularly reported to the Board of Directors throughout 2020.
(Mr. Bundhit Eua-arporn)
Chairman of the Nominating and Remuneration Committee