FGV Annual Report 2016

FELDA GLOBAL VENTURES HOLDINGS BERHAD 132 HOW WE ARE GOVERNED LONG TERM INCENTIVE PLAN FGV Long Term Incentive Plan (LTIP) was established and approved by the Board on 3 February 2016 for a period of ten (10) years. FGV LTIP consists of Performance Share (PS) and Restricted Share (RS) whereby the main difference is the eligibility of the employees in terms of job grades as well as the performance targets. FGV LTIP serves to reward, retain and motivate employees whose contributions are vital to the Group's business' growth and profitability. The first LTIP RS Grant which consists of 859,800 ordinary shares was made to selected employees on 1 July 2016. These employees were selected based on their level of contributions and performance in FYE 2015. This RS grant has a three (3) years vesting period and it shall vest automatically every year based on 30:30:40 ratio upon reaching the vesting dates as determined by the LTIP Committee. The LTIP Committee had vested 24,600 and 20,700 ordinary shares on 31 October 2016 and 31 December 2016 respectively to two (2) retiring employees. As at 31 December 2016, there are 814,500 outstanding ordinary shares in FGV. Under the above-mentioned LTIP RS Grant, the GP/CEO, Dato' Zakaria Arshad was granted 147,100 ordinary shares and no ordinary shares were vested to him in FYE 2016. Selected Key Senior Management was granted an aggregate of 388,300 ordinary shares or equivalent to 45% of total ordinary shares granted. No other RS Grant or PS Grant was made and none of the Non-Executive Directors were granted the LTIP RS Grant in the FYE 2016. CORPORATE INTEGRITY Since the signing of the Malaysian Corporate Integrity Pledge on 9 April 2012, FGV remains committed to uphold the integrity principles and strive towards creating a business environment that is free from corruption in the conduct of its business and in its interactions with its business partners and the authorities. In the journey towards achieving good governance, FGV is committed to a culture of integrity. This is to ensure that FGV Group conducts its businesses globally in compliance with laws and ethical values. Through the execution of the Directors' CoEC and CoBP, the COBCE, the Code of Ethics and Integrity Policy, GEH Policy, APID Policy, the Corporate Integrity Pledge, the Integrity Pact and FGV Integrity Plan, FGV Group is committed to: 1. Take pride in contributing towards FGV's success; 2. Uphold FGV's core values PRIDE (Partnership, Respect, Integrity, Dynamism and Enthusiasm); 3. Deliver products and services to customers as pledged; 4. Perform to our best ability at global standards, whilst continuously improving the quality of our products and services; 5. Adhere to all sets of laws, policies, procedures, rules, regulations and guidelines; and 6. Adopt an open and honest attitude in all aspects. SUSTAINABILITY The Group conducts its business responsibly by managing the economic, environmental and social risks and opportunities. The Group's commitment to sustainability is embedded in the SP20. The Group's implementation of the sustainability measures are monitored through proper action plans and ensuring frequent updates to the relevant Stakeholders. The Sustainability Statement is set out on pages 58-81 of this AIR 2016. The Group has published its second Sustainability Report in 2016 which is available on FGV's corporate website. The Sustainability Report 2016 represents a new chapter in FGV's journey and builds on its legacy and commitment to sustainable business practices. STATEMENT BY THE BOARD This Statement is made in accordance with a resolution of the Board of Directors and approved at the Board meeting dated 29 March 2017. On behalf of the Board Tan Sri Haji Mohd Isa Dato' Haji Abdul Samad Chairman CORPORATE GOVERNANCE STATEMENT