PTT assigns high importance to good corporate governance and the development of mechanisms of organizational management that are efficient, transparent, and effective, while also taking into account concerns related to stakeholder benefits. Corporate Governance Principles, the company's rules and regulations, are clearly defined through the Corporate Governance, Ethical Standards and Code of Business Ethics Handbook.
PTT Board of Directors
PTT's Board of Directors plays an integral role in defining the organization's strategic plans, vision, action plans and annual budget as well as in determining its remuneration and risk management, including monitoring management performance and operational efficiency through careful screening. PTT restricts the number of directors on its Board at no less than 5 but not exceeding 15, and each director must have been nominated by the Nomination Committee. Each director is an expert in a particular field, and all have substantial experience as senior executives in major organizations from various professional fields considered necessary to provide PTT with balanced management. For example, PTT's directors are knowledgeable in areas such as the energy and petroleum sector, law and jurisprudence, and accounting and finance. They shall not hold the position as PTT's executive, and shall not be the Chief Executive Officer or Management Director. Moreover, since 2001, PTT has determined that the Chairman of the board is to not be the same person as the Presenting & CEO in order to endure the transparency and accountability. The curriculum vitae and details of all directors can be found in the Annual Information Registration Statement (Form 56-1), in the Annual Report (Form 56-2), and on PTT's website.
PTT focuses on annually assessing the performance of the Board of Directors to ensure that Corporate Governance are carried out effectively fairly, and aligns with the organization's Corporate Governance principles. As of 2018, more assessments were introduced. There were assessment on the Chairman's roles and performance (existing topic of 'Chairman's role', part of the committee's overall evaluation, in combination with a small addition), in tandem with satisfaction assessment regarding the topic-specific committee's and the chairman's performance.
Therefore, for 2018, there are 5 types of assessment forms used. This comprises of the committee-level assessment, individual-level assessment (self-assessment), individual-assessment (peer review), topic-specific assessment (topic specific director assesses relevant topic-specific committee), and assessment of the committee's chairman's performance and roles, satisfaction regarding topic-specific committee's performance and their respective chairman (assessed by all directors). These are the tools for the Board to review past performance, obstacles and challenges in the past year. Results from the assessments are disclosed in the Annual Information Registration Statement (Form 56-1) and the Annual Report (Form 56-2). In addition, since 2017, the Board has adopted KPIs to measure the Board of Directors' performance, which will factor into the Board's remuneration consideration. In addition, PTT's Board of Directors is evaluated by an independent assessor through the Ministry of Finance's Office of the State Enterprise Policy Office (SEPO) on an annual basis, as well as through the Thai Institute of Directors (IOD) every two years or IOD required period. As for Board remuneration, PTT's Remuneration Committee defines a fair and appropriate remuneration policy, and is responsible for reviewing the policy by considering factors as appropriateness, director responsibilities, the company's financial status, performance according to the PTT Performance Agreement (PA), and peer benchmarking.
Executive Compensation for the 2018 committees is considered based on 3 factors. They are as follows: PTT's performance according to the State Enterprise Review System, leadership and managerial capabilities, and performance against the Group's vision. PTT has ensured public disclose of the metric used to consider executive's compensation in PTT's annual report. The content clearly states the President and Chief Executive Officer's compensation, each Board of Director's compensation and a total value for Executives compensation. Nevertheless, the auditor and audit committee that PTT uses have been verifies to ensure transparency and accountability.
The Management is responsible for overseeing the company's business and daily activities, where the President and CEO is the top executive in charge of company management, as entrusted by the Board of Directors. The President and CEO must also strictly supervise company management in accordance with the work plan and budget approved by the Board of Directors, while demonstrating integrity and accountability, for the best interests of the company and its shareholders. Moreover, the President and CEO manage the company through the PTT Management Committee (PTTMC), which then appoints 24 sub-committees to handle and manage internal affairs appropriately, with maximum efficiency and effectiveness.
Management remuneration is in line with the policies and criteria set by the Board of Directors, as well as those determined by the Ministry of Finance's Performance Agreement, entirely covering economic, social, and environmental dimensions. The President and CEO, as well as executives at all levels, jointly determine Key Performance Indicators (KPIs) each year to serve as guidelines for PTT's business direction and to evaluate performance.
PTT's Executive Compensation for 2018
|Compensation (THB)||President and Chief Executive Officer||Executive||Total|
**Remarks: Ratio between President and Chief Executive Officer and Executive's compensation to employee compensation is 36 : 1
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