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Principle 5 The Company Shall Remunerate Directors and Officers Fairly and Responsibly

5.1 Remuneration Committee. The board shall establish a remuneration committee of at least three members which shall:

•   review the company's remuneration policies for the board of directors and senior management, which should be approved by the shareholders and
•   make recommendations regarding remuneration policies and amounts for specific persons to the whole board, taking account of total remuneration including salaries, fees, expenses and employee benefits.
•   Remunerate board members based on their attendance and performance.

The committee may be merged with the nominating committee.

5.2 Remuneration Committee Charter. The committee shall adopt a written charter which shall, at a minimum, state the above purposes and other matters in Appendix D.

Recommendation: The committee should include only independent directors or, alternatively, only non-executive directors of whom a majority are independent directors and the chairman is an independent director. This is consistent with international best practice and it recognizes that the remuneration committee must exercise judgment free from personal career conflicts of interest.

5.3 Standard for All Remuneration. Remuneration of both directors and officers should be sufficient enough to attract, retain and motivate persons of the quality needed to run the company successfully, but the company should avoid paying more than is necessary for that purpose.

5.4 Non-Executive Directors' Remuneration. Remuneration of non-executive directors shall not include performance-related elements such as grants of shares, share options or other deferred stock-related incentive schemes, bonuses, or pension benefits.

5.5 Officers' Remuneration. Remuneration of officers should be structured so that a portion of the total is linked to company and individual performance and aligns their interests with the interests of the shareholders. Such rewards may include grants of shares, share options and other deferred stock-related incentive schemes, bonuses, and pension benefits which are not based on salary. If an officer is also a director, his remuneration as an officer should take into account compensation received in his capacity as a director. All share incentive plans should be approved by the shareholders.

Recommendation: All performance-based incentives should be awarded under written objective performance standards which have been approved by the board and are designed to enhance shareholder and company value, and under which shares should not vest and options should not be exercisable within less than two years of the date of award of the incentive.
Recommendation: All plans for performance-based incentives should be approved by the shareholders, but the approval should be only of the plan itself and not of the grant to specific individuals of benefits under the plan.
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