FWD Group Holdings Limited (01828) has published the formal Terms of Reference outlining the mandate, structure and operating procedures of its newly established Board Compensation Committee, constituted on 19 February 2022.
The committee’s primary objectives are to: • Oversee group-wide remuneration policies and practices to ensure alignment with corporate culture, business objectives, risk appetite and long-term stakeholder interests. • Assess and approve pay structures for Executive Committee Members, Material Risk Takers and Key Persons in Control Functions, with explicit consideration of both performance and risk management factors. • Review director remuneration, including that of the Board chairman, and approve compensation arrangements for loss or termination of office.
Authority and resources: The committee is empowered to request remuneration information from directors and employees, grant awards under the group’s equity incentive plans, and engage external advisers at the company’s expense. While it may delegate certain tasks to the Group CEO or others, ultimate responsibility remains with the Board.
Membership requirements: • Minimum of three directors, with a majority—and the chair—being independent non-executive directors. • At least one member must also sit on the Board Risk Committee to ensure remuneration decisions reflect enterprise risk considerations. • Members must disclose any conflicts of interest and recuse themselves from related deliberations.
Meeting protocols: The committee must meet at least twice annually; a majority of members forms a quorum. Meetings can be conducted via electronic means, and minutes are to be recorded in detail and made available to the full Board.
Key duties include: 1. Recommending and monitoring the FWD Remuneration Policy for senior executives and the Directors’ Remuneration Policy. 2. Evaluating and setting fixed and performance-based pay, equity incentives and contractual terms for Executive Committee Members, Material Risk Takers and Key Persons in Control Functions. 3. Approving compensation linked to dismissal, removal or misconduct to ensure fairness and contractual compliance. 4. Administering equity incentive plans and advising on new short- and long-term incentive structures consistent with business strategy. 5. Coordinating with the Risk Committee to confirm that remuneration frameworks discourage excessive risk-taking. 6. Ensuring no director or executive participates in decisions regarding his or her own remuneration.
Reporting and disclosure: The committee will keep the Board fully informed of its decisions, provide minutes for inspection and make these Terms of Reference available on the company’s and Hong Kong Stock Exchange websites.
The detailed framework underscores FWD’s commitment to transparent, risk-aligned and performance-driven remuneration governance across the group.