Directors’ And Key Management’s Remuneration Policy

1. Purpose

1.1 The Remuneration Policy (“the Policy”) has been adopted by the Board of Directors (“Board”) of M K Land Holdings Berhad (the “Company” or “M K Land”) on 8 October 2018 and it sets out to provide remuneration principles and guidelines for the Non-Executive Directors (“NEDs”), the Executive Chairman (“EC”) and Executive Director (“ED”) of M K Land, collectively known as the Directors and the Group Chief Executive Officer, Group Chief Operating Officer and Group Financial Controller (“Key Management”).

1.2 The Policy is designed with the aim to support the Company’s long term objectives and create a strong performance-orientated environment to be able to attract, motivate and retain the right talent in the Board and Key Management. The Remuneration Policy shall adhere to the following key principles:

i) The remuneration policy and procedures shall be aligned with the business strategy and long-term objectives of the Company and are competitive and comparable with the relevant market and industry;

ii) Remuneration shall commensurate with the level of responsibility of the Directors and Key Management as well as the demands, complexities and performance of the company;

iii) To consider appropriate incentives to attract talent as well as nurture and retain high calibre Directors and Key Management, whilst taking into account the interests of other stakeholders, including shareholders and employees; and

iv) To ensure that the remuneration and incentives for Independent Directors do not conflict with their obligation to bring objectivity and independent judgment on matters discussed at board meetings.

1.3 The Board recognizes the need to be competitive in today’s volatile business environment and the Directors’ and Key Management’s remuneration packages are dictated by market competitiveness and level of experience or responsibilities involved. Any review or change to the existing package will be deliberated upon by the Board as a whole upon recommendation from the Nomination and Remuneration Committee, with individual Directors abstaining from discussion of his/ her own remuneration.

2. Scope of Remuneration Policy

2.1 This policy is applicable to the EC or the Managing Director (“MD”) or ED or Group Chief Executive Officer (“Group CEO”), Group Chief Operating Officer (“GCOO”) and Key Management, who shall be primarily responsible for, among others, running the Company and its subsidiaries’ (“Group”) business operations, management of corporate and financial affairs and who shall report directly to the Group CEO or MD of the Company to assist the Board in meeting the operational objectives, strategic goals and business requirements of the Group.

3. Policy on Salaries of Executive Chairman or Managing Director or Executive Director and Key Management

3.1 Remuneration packages for executive directors and Key management shall have a balance between fixed and performance-linked (variable) elements. The relative weightage of fixed and variable remuneration for performance varies with level of responsibility, complexity of the role and typical market practice.

3.2 The executive remuneration should be set at a competitive level for similar roles within comparable markets to recruit and retain high quality executive directors and Key management. Individual pay levels should reflect the performance of the individual, skills and experience as well as responsibility undertaken.

3.3 The remuneration package for EC/ED and Key Management shall consists of both fixed (i.e. base salary and benefits) and variable (performance based incentive) remuneration components with the following key objectives:

3.3.1 Base salary and benefits:

(i) consists of base salary and benefits.
(ii) includes payment for performing the day job.
(iii) recognises status and responsibilities.
(iv) provides basic benefits, including retirement funding, vehicle and/or housing allowances, etc.
(v) has in place severance arrangements.

3.3.2 Short term incentives:
(i) creates a performance culture.
(ii) supports short-term operational objectives.
(iii) rewards achievement of financial and short-term personal targets.

3.3.3 Long term incentives plan:
(i) long-term based.
(ii) purports to align executives to shareholder value.
(iii) retains key talents.
(iv) addresses skills shortages.

3.4 Salaries payable to the EC/ED shall not include a commission on or percentage of turnover and the performance-based incentive is determined in a manner which promotes sound risk management and does not induce excessive risk-taking.

3.5 Variable remuneration may contain any or all of the following:
(i) Special short-term incentive (i.e. bonus) payments to reward individuals for outstanding business contributions, and in meeting key Performance Indicators (“KPIs”) and/or set at a level sufficient to provide the EC/ED and the Key Management with the motivation to achieve operational targets; and

(ii) The long-term incentive (i.e. performance-based incentive) payments shall be designed to link reward with KPIs that drive sustainable growth in shareholder value over the long term, with the objective of aligning the EC/ED and Key Management’s incentives with shareholders’ interests, and to balance the short-term with long-term focus.

3.6 With regards to the clauses under 3 above, in considering the variable remuneration payments, the Company shall take into account various factors including:

(i) The level of Company’s available cash and cash equivalents;
(ii) Projected levels of expenditure to undertake new projects or investment by the Company; and 
(iii) Meeting the expectations of shareholders.

4. Policy on Other Benefits (Non-Cash Benefit) for the EC, ED and Key Management

4.1 EC/ED shall be entitled to benefits provided to employees of the Company and other additional benefits as approved by the Board.

4.2 Allowances relating to business expenses (i.e. entertainment and travel) incurred are reimbursed in such a way as to give rise to no additional compensation to the EC/ED and Key Management. All claims for reimbursements must be accompanied with receipts and shall be submitted to the respective immediate superior for processing on a timely basis.

5. Policy on Remuneration of NEDs

5.1 Fees payable to the NEDs shall be by a fixed sum, and not by a commission on or percentage of profits or turnover.

5.2 The NEDs shall receive remuneration in the form of directors’ fees and other benefits payable as compensation for their services plus the reimbursement of expenses (i.e. meeting allowances) incurred in the course of performing their services.

5.3 The remuneration of the NEDs shall take into account fee levels and trends for similar positions in the market and the time commitment required from the director.

5.4 The fees of the NEDs are reviewed by the Board and where necessary, advised by subject matter experts or consultants, taking into account the fees paid to NEDs of comparable companies and capacity to attract and retain highly competent NEDs.

5.5 The NEDs are not entitled to receive performance-based bonuses nor participate in short-term and/or long-term incentive plans.

6. Policy on Remuneration of Alternate Director

6.1 Any fee paid by the Company to an alternate director shall be deducted from that director’s remuneration.

7. Implementation and Adherence to the Policy

7.1 The fees of Directors, and any benefits payable to directors shall be subject to annual shareholders’ approval at a general meeting.

7.2 Any benefits payable to the Directors (save for entitlement given due to his/her office as Executive/ Management position) including any compensation for loss of employment of a director or former director of M K Land Group shall be approved at a general meeting.

7.3 Directors who are shareholders shall abstain from voting at general meetings to approve their fees.

Similarly, the EC/ED shall not be involved in deciding their own remuneration.

7.4 Disclosure on the Directors’ and at least top five (5) Key Management’s remuneration on a named basis will be made in the Corporate Governance (“CG”) Overview Statement of the Company’s Annual Report and/or CG Report of the Company. Such report will include a summary of this Policy and details of the Directors’ and Key Management’s remuneration in accordance with the Malaysian Code on Corporate Governance and Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

8. Amendment

8.1 The Board will review and assess the effectiveness of the Policy on a regular basis. Any amendment to the Policy shall be deliberated and approved by the Board as a whole from time to time as the Board may consider fit.

8.2 This Policy has been reviewed and approved by the Board at its Board Meeting held on 16 May 2024.