The Board of Directors (“Board) of Dagang NeXchange Berhad (“DNeX” or the “Company”) is mindful that fair remuneration is critical to attract, retain and motivate the right talent in the Board and senior management of DNeX and its subsidiaries (collectively referred to as the “Group”). To this end, this remuneration policy (“Policy”) is set out to provide guidelines with regards to remuneration package for the Board and senior management of the Group in line with the best practice of the Malaysian Code on Corporate Governance (“MCCG”) issued by the Securities Commission Malaysia.
2.1 This Policy is designed with the aim to suppport the Group’s key strategies and create a strong performance-oriented environment and be able to attract, motivate and retain talent as well as promoting business stability and growth of the Group.
2.2 This Policy is based on the following key principles:
(i) the Group’s desire to attract talent as well as nurture and retain high calibre directors in the Board and senior management to drive the Group’s long-term objectives;
(ii) the remuneration package should take into account the complexity of the Group’s business and the individual’s responsibilities;
(iii) the remuneration should also be aligned with the business strategy and long-term objectives of the Group;
(iv) incentive plans, performance measures and targets shall be aligned with shareholders’ interest in mind;
(v) the remuneration and incentives for Independent Directors should not conflict with their obligation in bringing objectivity and independent judgment on matters discussed; and
(vi) total remuneration shall be set at levels that are competitive with the relevant market and industry.
3. Scope and application
3.1 This Policy should be read together with the relevant enumerations encapsulated in the following legislations:
(i) Companies Act 2016 of Malaysia (“CA 2016”), as amended, consolidated, superseded or replaced from time to time; and
(ii) Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“MMLR”).
3.2 Where there is a conflict between the contents of this Policy and the aforementioned legislations, the relevant enumerations contained in the said legislations shall prevail.
3.3 Where applicable, words importing one gender include the other gender and words importing the singular include the plural and vice versa.
3.4 This Policy shall be periodically reviewed by the Board through the Nomination and Remuneration Committee (“NRC”) where it considers various factors including the directors’ fiduciary duties, risks, time commitments and statutory duties as well as relevant benchmark studies (if any).
4. Remuneration components
4.1 Fixed remuneration for Group Managing Director (“GMD”), Executive Director(s) (“ED”) and senior management
To provide fixed remuneration comprising fixed salary and benefits to reflect the scale and complexity of both the business and the role, and to be competitive with the external market.
The fixed salary is determined according to:
• The scope of the duty and responsibilities;
• The conditions and experiences required;
• The ethical values, internal balances and strategic targets of the Group;
• The corporate and individual performance (for salary increment);
• Current market rate within the industry and in comparable companies; and
• The scale and complexity of both the business and the role.
The GMD, ED and senior management are entitled to receive benefits available to all employees of the Group. The said benefits include group insurance coverage, medical benefits, motor vehicle related benefits and annual leave.
The GMD, ED and senior management may also receive other benefits that are appropriate in terms of the individual’s role, for example annual leave passage and security services.
4.2 Variable remuneration / Bonus for GMD, ED and senior management
A performance-based sum (paid via cash, shares or stock options) may be awarded to the GMD, ED and senior management for attaining or exceeding their assigned key performance indicators (“KPIs”).
Payment of bonus, if declared by the Company, shall be based on corporate and individual performances against annual measures and targets set at the start of the year, evaluated at the end of the financial year. A discretionary assessment may also be made to ensure that all factors which include measurable and not directly measurable are considered.
4.3 Directors Fee for Non-Executive Directors
The directors’ fee entails payment of a fixed sum to Non-Executive Directors in recognition of their services.
The directors’ fees are payable on a monthly basis and after each month of completed service of the Non-Executive Directors. The mandate from the shareholders shall be sought at every AGM for the payment of the directors’ fees.
The level and structure of Non-Executive Directors’ remuneration will primarily be benchmarked to ensure competitiveness with the Malaysian market.
The level and structure of Non-Executive Directors’ remuneration is reviewed by the NRC who will make recommendations to the Board. Non-Executive Directors do not vote on their own remuneration.
4.4 Other benefits and allowances for Non-Executive Directors
Non-Executive Directors shall be entitled to attendance allowance for each Board or Board Committee meeting they attend.
Benefits such as medical, hospitalisation and dental benefits may also be provided to increase the economic security of Non-Executive Directors and as an incentive to attract and retain talent.
Non-Executive Directors may also be offered shares or stock options as part of their other benefits subject to the terms of the by-laws governing such scheme and provided that any such entitlement under such scheme must have been approved by the shareholders of the Company in a general meeting.
5. Governance of remuneration
5.1 Oversight of remuneration
5.1.1 The NRC shall assist the Board in developing and administrating a fair and transparent procedure for setting policy on remuneration of directors and senior management so as to ensure that remuneration packages are determined on the basis of the directors’ and senior management’s merit, qualification and competence, while having regard to the Company’s operating results, individual performance and comparable market statistics.
5.1.2 The GMD and ED do not form part of the composition of the NRC. As such, the GMD and ED play no part in the deliberation or decision-making of their own remuneration but the GMD and/or ED may attend the NRC meetings at the invitation of the Chairman of the NRC, if their presence is required.
5.1.3 The remuneration of the GMD and ED (in relation to the components of salary and bonus) shall be approved by the Board, with the individual director abstaining from discussion of his own remuneration.
5.2 Disclosure of remuneration
Directors’ remuneration shall be disclosed in the Annual Report on a named and individual basis, stating the amount received or to be received from the Company and on a Group basis respectively. The remuneration breakdown shall amongst others include fees, salary, bonus, benefits in-kind and other emoluments as the case may be. The disclosure shall also include Directors who were appointed or retired during the year.
6. Review of Policy
This Policy will be reviewed periodically, as and when appropriate, to reflect the current best practices.
This Policy was adopted by the Board of Directors on 8 October 2021.