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Nomination and Remuneration Committee Charter Template

​Posted by: Pesync Team

This Nominations and Remunerations Committee Charter Template includes the controls, procedures of the committee’s work, functions, mechanism of selecting its members, duration of their membership, and their remunerations.​

Introduction:

The Nominations and Remunerations Committee (the “Committee”) of the Company, is prepared with the aim of aligning with the company’s delegation of authority that requires the Board of Directors approves the charter of Nominations and Remunerations Committee. 

This Nominations and Remunerations Committee Charter Template includes the controls, procedures of the committee’s work, functions, mechanism of selecting its members, duration of their membership, and their remunerations.

Objectives:

The Nomination and Remuneration Committee of the Company Board of Directors aims to assist the Board of Directors in carrying out its related oversight duties and to present this to the Board of Directors, including, but not limited to the following:
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1. Overseeing the nomination process of the Board of Directors, Committees, and Executive Management, and identifying individuals who are eligible for membership of the Board of Directors.
2. Recommending to the Board of directors the candidates for Board membership.
3. Supervising all matters related to the remuneration of the members of the Board of Directors and its committees and the Executive Management.
4. Overseeing succession plans for key positions (such as executive managers such as CEO and CFO).
5. Recommending to the Board of Directors on how to evaluate the members of the Board and its committees.
6. Recommending to the Board of Directors to update the policies related to the Board membership.
7. Recommending to the Board of Directors annual bonuses and increments on salaries for all company employees.

Committee Membership Rules:
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1. The Nomination and Remuneration Committee shall be formed by a decision of the Board of Directors.
2. The committee shall be composed of not less than (3) and not more than five (5) non-executive members or others.
3. The committee shall ensure annually that there is no conflict of interest if the member of the Board of Directors is a member in the Board of another company.
4. The membership term of the committee shall be a maximum of three years except in the first Board term, beginning with the decision of the Board of Directors to form the committee and ending in conjunction with the term of the Board of directors. The membership of the committee members also ends in the following cases:
   • If the committee member is a Board member, their membership terminates with the end of their Board membership or by voluntary resignation from the committee.
   • If the committee member is a non-board member, their membership shall terminate either by voluntary resignation or at the end of the committee's term.
5. The Board of directors has the right to dismiss/ replace any or all the committee members at any time it deems appropriate. A member of the committee may also resign from the committee’s membership if it is at an appropriate time.

Membership Obligations:

1. Committee members must address any conflict-of-interest situation that may arise for any of its members in any of the subjects brought before it in a manner that achieves justice and efficiency and is consistent with the relevant provisions.
2. Disclosure of any direct or indirect interest that he has in any of the topics presented to the committee, and that member must refrain from attending and voting on the subject matter of the conflict of interests.
3. Voting on topics submitted to the committee, except for issues in which the member has a direct or indirect interest.
4. Attending meetings, and notifying the chairman of the committee if it is not possible for any reason to attend any meeting of the committee
5. Not to appoint another person to attend on his behalf in his absence from any committee meeting
6. Informing the Chairman of the Board of Directors if he wants to resign from the membership of the Committee.

Nominations Roles and Responsibilities:

The duties of the committee include, but are not limited to, the following:

1. To suggest clear policies and standards for membership in the Board of Directors, Executive Management, and company representatives in the subsidiary companies.
2. Establish, recommend, and update annually the nomination criteria, and policies and criteria for membership in the Board and Executive Management.
3. Review and recommend to the Board of Directors the annual recommendations for the appointment and re-election of the members of the Board of Directors and the Executive Management.
4. Prepare a description of the capabilities and qualifications required for membership
5. Periodically review the structure of the Board of Directors, Committees, and Executive Management, and submit recommendations regarding size, composition, and other recommended changes.
6. Reviewing the remuneration of the Board’s committees and recommending any amendments thereof and presenting them to the Board of Directors for approval. The committee may submit its recommendations to the Board of Directors if one of the Board’s seats becomes vacant by appointing new members when needed.
7. Develop a job description for executive and non-executive directors and senior Executive Management.
8. Management and supervision of succession plans for key positions (i.e. executives such as CEO and CFO).
9. Determine the time that the member must allocate to the work of the Board of Directors.
10. Setting procedures to be followed if the position of a member of the Board of Directors or a senior executive becomes vacant.
11. Check annually of no conflicts of interests between the Chairman of the Board of directors, members of the Board and CEO, and other important administrative positions, and whether the member is a member of the Board of Directors of another company.
12. Assist the Board of Directors in assessing the performance of the Board of Directors and its committees and the Executive Management in terms of strengths and weaknesses and in setting and implementing plans to define and enhance the competencies of members of the Board of Directors by recommending the necessary procedures.
13. Ensure that there is an effective definition and guidance approach for new Board members, in addition to the presence of ongoing educational programs, and regularly review their effectiveness.

​Remuneration Roles and Responsibilities:

The duties of the committee include, but are not limited to, the following:

1. Establishing a remuneration policy for members of the Board of Directors and its committees and the Executive Management, reviewing and recommending them to the Board of Directors in preparation for their approval by the ordinary General Assembly (in cases that require such as required by the relevant regulations), provided that they follow the criteria related to performance, and disclose them, and check their implementation. It should include the following:
   1. Its consistency with the company's strategy and goals.
   2. Its compatibility with the size, nature, and degree of risk of the company.
   3. Attracting and retaining talented Board members and Executive Management, while motivating them to achieve the company's success and enhancing shareholder value in the long run.
2. Determining remuneration based on job level, tasks and responsibilities assigned to them, educational qualifications, practical experience, skills, and level of performance.
3. Taking into consideration the practices of other companies in determining remunerations, while avoiding the unjustified increase in remuneration and compensation that may result from that.
4. Taking into consideration cases of stopping the payment of the remuneration or its recovery if it was found that it was decided based on inaccurate information provided by a member of the Board of Directors or the Executive Management.
5. Clarify the relationship between the remuneration granted and the applicable remuneration policy and indicate any significant deviation from this policy.
6. Periodically reviewing the remuneration policy and assessing its effectiveness in achieving the objectives envisaged from it.
7. Recommend to the Board of Directors the remuneration of the members of the Board of Directors, the committees emanating from it and the senior executives of the company in accordance with the approved policy.
8. Review and recommend Executive Management arrangements, such as contract terms, annual remunerations, and participation in the company's short and long-term incentive plans.
9. Recommend evaluating, promoting, and proposing annual increases and remunerations amend salaries in relation to the CEO, and recommend this to the Board of Directors.
10. Review the compensation and retirement plan and employee incentive policies and plans.
11. Provide the Board and Executive Management with adequate information and external advice to ensure that informed wage decisions are made.

Committee Secretary:

The committee shall appoint a secretary to keep records of the committee's procedures and decisions, as follows:
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1. The secretary of the committee must be from among the committee members or others.
2. The secretary of the committee should not have any voting rights regarding recommendations, directives, and decisions.
3. The responsibilities of the committee secretary include, but are not limited to:
   1. Schedule meetings.
   2. Providing administrative and logistical support.
   3. Drafting the agenda and meeting minutes.
   4. Maintain complete records of the committee's meetings.
   5. Circulating the committee’s decisions to the parties concerned.
   6. Coordination with the departments concerned on the decisions of the committee that require compliance with laws and taking regulatory measures.
   7. Establish a mechanism to track and follow up on committee decisions.
   8. Executing any other tasks or responsibilities assigned to him/her by the committee chairman.

Committee Meetings, Procedures, and Controls:
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1. Meetings are determined by the chair of the committee, or at the request of any of its members.
2. The chair of the committee chairs all committee meetings. In his absence, the members present must appoint a president to act on his behalf.
3. Other Board members may not attend the Nomination and Remuneration Committee meetings except at the invitation of the Committee.
4. The Secretary of the Committee, in conjunction with the Chairman of the Committee, is responsible for preparing the agenda for the meetings and related documents, if it is circulated to the members of the committee (10) days before the date of the meeting, either by written or oral notification, by phone or by email.

Number of Meetings:

Committee members meet at least twice a year on a semi-annual basis or more, as needed.

Vote and Quorum:
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1. Committee meetings are only valid if most of its members are present.
2. Committee members are not authorized to appoint another person to attend the meetings instead of him/her. Nevertheless, members can attend using modern means of communication, and attendance is deemed acceptable.
3. Each member of the committee shall have one vote.
4. The decisions of the committee shall be issued by the majority of the votes of the attendees represented at the meeting. In case the votes are equal, the chairman of the committee will have the most likely vote.

Minutes of Meetings:

The secretary of the committee shall record the minutes of the committee's meetings, and include all procedures, facts, decisions, deliberations, and attendance, if it is circulated to all its members after approval within (10) days.

Formal accreditation of meeting minutes must be obtained and signed by all members present. The committee secretary maintains a record of the committee's meetings and must present it to the Board of Directors through the committee chairman.

Powers of the Committee:

In fulfilment of its oversight role, the committee is empowered to:

1. Investigation of any matter submitted to it, it has complete freedom to access all the company’s books, records, facilities and employees, and the committee has the right to view all data, information and records related to company remuneration and compensation and to review the reports of administrative succession of executives.
2. The use of legal consultants, accountants, and independent consultants, or incurring other expenses for this purpose, which the company will bear its fees in accordance with the approved powers.
3. Requesting any employee working for the company, the company's external legal advisor, or its external auditors to meet with the committee or any of its members.
4. The Chairman of the Committee attends the Ordinary General Assembly to answer the questions posed by the shareholders.

Reports:

The committee reports to the Board of Directors as follows:

1. After each committee meeting.
2. On any other matters related to the responsibilities of the committee.
3. The main activities, decisions, or recommendations that the committee deems appropriate.
4. The report may be submitted to the Board of Directors orally or in writing by the Chairman of the Committee or any of its members appointed by the Committee to present the report.
5. The Nomination and Remuneration Committee report includes compensation for members of the Board of Directors, members of the Committee and Executive Management, in addition to the number of meetings held during the year and the number of meetings each member attended to include in the report of the Board of Directors.

Nomination & Remunerations Committee Members Fees:

1. The annual remunerations for the members of the committee are determined based on the policy set by the Board of Directors and in accordance with the company's articles of association and the relevant laws and regulations.
2. The nomination & remuneration committee members' annual fees are US$ 15,000 (example), in addition to the sitting fees each meeting, at the rate of US$ 1,500 for each member for one session.
3. The company is obliged to cover transportation, housing, and any other expenses to enable the members to attend meetings and participate in the activities of the committee related to its tasks.
4. Travel tickets and accommodation insurance are secured for members residing outside the region in which the meetings of the Board of directors of the internal or external trips are held at the business class, and if the committee member purchases the ticket, it is compensated with a cash amount for the value of the actual ticket.
5. All the above remunerations, allowances and compensation shall be disbursed annually, and this shall be done after the end of the fiscal year.
6. The details of the remunerations received by the members of the committee shall be disclosed within the contents of the annual report of the Board of Directors.

Revision and Amendments:

This charter is reviewed periodically based on the recommendation of the Board of Directors. The committee conducts these assessments the way it sees it.

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