22 May 2014

Board adopts Guidelines for Executive Remuneration

(Singapore, 22 May 2014)

In accordance with Section 6-16a of the Norwegian Public Limited Companies Act, the Board has prepared guidelines on the establishment of salaries and other remuneration for executive management for the current and next fiscal year, which is to be received by the AGM. These guidelines are attached here for the information of shareholders.

BW LPG’s remuneration policy

Remuneration policy at BW LPG is driven by the Company’s strategic mission, values, and in particular, the Company’s objective to attract, retain and develop market-leading talent.

Remuneration in broad terms – considering not only salary, benefits and performance incentives, but also working environment, recognition of achievements, and learning and development – is designed to attract and retain the people best suited to support achievement of the organization’s goals in the long run.

As such, executive remuneration is structured to:

  • Support achievement of BW LPG’s corporate strategy;
  • Comply with applicable regulations and reflect standards of corporate governance in the markets in which we operate;
  • Take into account the global and local market conditions generically and specific to the industry in which we operate;
  • Reflect and strengthen the common interests of BW LPG’s employees and shareholders;
  • Be, and be seen to be, fair, transparent and non-discriminatory;
  • Reward both delivery of results and the way in which those results are achieved;
  • Differentiate appropriately varying roles, responsibilities and competencies; and
  • Reward both short and long – term contributions and results.

Determining and implementing remuneration strategy

The Company operates its decision-making process for implementing and amending remuneration strategy, policy and implementation including the determination of salaries and other remuneration for the corporate executive committee, in accordance with the provisions of the Public Limited Liability Companies Act sections 5-6 and 6-16(a), notwithstanding that the latter is not a requirement of companies domiciled outside Norway.

The decision-making process includes an annual review and approval by the Remuneration Committee of the Company’s Compensation Strategy, a review of annual adjustments to compensation for the business in aggregate, and for the executive management team individually.

Remuneration of the Executive Team

BW LPG’s Board defines the senior Executive Team as including the most senior management in each functional area – presently the Chief Executive Officer (‘CEO’), Chief Financial Officer (‘CFO’), Head of Fleet Supervision (‘HoFS’), and the Chief Commercial Officer (‘CCO’).

The remuneration structure for the senior executive team incorporates any of the following elements:

  • Fixed remuneration:
  • Variable remuneration (short-term and long-term incentives);
  • Pension and insurance schemes;
  • and Other employment-related benefits.

Fixed remuneration

Base salaries are the only fixed remuneration paid to executives.

Base salaries are designed to compensate employees for the roles and responsibilities undertaken in their roles, and the required competencies. Therefore base salary is set with the intention to be competitive in the markets in which the company operates (geographical and industrial) in relation to each individual’s role and capabilities. Base salaries are normally reviewed once a year.

Variable pay

Variable pay includes a short-term component; the Annual Performance Bonus, and a long-term component; the Long-Term Incentive Plan.

Annual Performance Bonuses are awarded early each calendar year in relation to the performance of each employee against performance targets established at the beginning of that calendar year. The aggregate bonus pool available for payment is determined with close reference to Company profitability and Total Shareholder Returns. The allocation of bonuses from that pool is closely related to annual performance against pre-determined performance targets.

Performance targets for the executive management team are reviewed with the Remuneration Committee prior to establishment. The CEO’s performance against performance targets is determined by the Remuneration Committee in consultation with the full Board of Directors.

For the CEO, maximum Annual Performance Bonus is set at 6 months’ salary. Where greater than 2 months’ salary is payable as Annual Performance Bonus, the bonus shall be paid 50% in cash and 50% in shares of the Company, with the acquisition price per share set at the volume weighted average price of the share in the 3 months to 31 December of the relevant year.

For the other members of the executive management team, maximum Annual Performance Bonus is set at 3 months’ salary.

The Long-Term Incentive Plan allows for an additional incentive payment to be earned where the average Total Shareholder Return achieved over a fixed period is 15% or higher. A three-year average achievement of 15% TSR will result in a payment of 2 months’ salary. In the first two years of the plan the achievable payouts are 0.67 months and 1.33 months respectively, determined as the number of years of achievement divided by three years.

Pensions and Insurance schemes

Pensions are paid to employees commensurate with local practice in the location of employment.

All members of the executive management team are located in Singapore, where payments to the Central Provident Fund are mandated for citizens and permanent residents. BW LPG makes the standard contribution required for each eligible member of the executive management team.

Insurances are instituted for employees in line with local practice in the location of employment.

All members of the executive management team benefit from medical insurance in line with Company’s practice, and are protected by Directors’ and Officers’ insurance in relation to their service on subsidiary Boards of the Group.

Other employment-related benefits

BW LPG’s employees are provided employment-related benefits commensurate with normal local practice in the location of employment. These benefits extend to members of the executive management team. Employment-related benefits beyond the compensation explicitly set out in these guidelines are not significant in relation to base salary for any member of the executive management.

For further information, please contact:

Vijay Kamath
Chief Financial Officer
BW LPG Limited
Tel: +65 6705 5506
Email: vijay.kamath@bwlpg.com

ABOUT BW LPG

BW LPG is the world’s largest very large gas carrier (VLGC) owner and operator based on number of VLGCs and by LPG carrying capacity. BW LPG owns and operates 36 gas carriers with a total carrying capacity of about 3 million cbm and a further 672,000 cbm of capacity on order in Korea. With 35 years of operating experience in LPG shipping and experienced seafarers and staff, BW LPG offers a flexible and reliable service to customers. BW LPG is associated with BW Group, one of the world’s leading shipping groups. BW Group is involved in oil and gas transportation, floating gas infrastructure, environmental technologies and deep-water production.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.