A. PURPOSE
This policy aims at setting up and identifying the controls and principles for the remuneration paid to the members of the Board of Directors and its committees.
The purpose of this is to establish a clear remuneration policy to be approved by the Board of Directors and the general assembly, along with observing the adherence to standards that involve performance, disclosure, and verification of implementation. As this helps urge the Board of Directors’ members for the success of strategies, business development, and realization of long- and short-term visions
B. SCOPE
This policy applies to the company, and its branches within the Kingdom of Saudi Arabia. This policy includes controls and principles that regulate and identify rewards and remunerations, as well as any financial benefits for the members of the Board of Directors, and its committees. This policy must observe adopting standards that are relative to the performance of the Board of Directors’ members, disclosure about the mechanisms determining those remunerations, and verifying the implementation, in addition to the criteria of periodic review, update and approval of the policy.
Document Title: Remuneration Policy for the Board of Directors’ Members and its
Committees Al Rajhi Takaful
Issue Date: / / 2021 Review Date: / / 2024
Approval Authority:
BOD Board of Directors Signature & Date / / 2021
Approval Authority:
CEO Mahmoud Dahduli Signature & Date Approved on 12 / 12 / 2021
Policy Owner:
Director - Compliance Waeel Abdulaziz Al Murshed Signature & Date Approved on 29 / 11 / 2021
Policy Author: Director - Compliance | Waeel Abdulaziz Al Murshed
Reference: LC-CMP-11/21-003 Page 2 of 4
C. POLICY
1. CONTROLS AND REGULATIONS
In view of the provisions of the articles regulating the remuneration of the Board of Directors’ members and its committees in the related laws and regulations issued by the competent authorities (The entity that performs a regulatory or supervisory role for the insurance sector in the Kingdom of Saudi Arabia). The remunerations of the members of the company’s Board of Directors and its committees are regulated in accordance with the following principles and rules:
1.1 The company is committed to apply the provisions of its Articles of Association, Companies Law and the related implementing regulations. While emphasizing that in the event that any conflict may occur in this policy with any laws, statutory regulations, the priority shall be given to the application of the statutory or legal text stated in the law or regulation and to update it whenever it occurs, as well as to eliminate items that conflict with them in the applicable regulations.
1.2 The members of the Board of Directors may not vote on the item of the remuneration of the Board of Directors’ members in the meeting of the General Assembly.
2. TERMS DETERMINING AND ORGANIZING THE REMUNERATION OF THE BOARD OF DIRECTORS’
MEMBERS AND ITS COMMITTEES
2.1. The Board of Director determines- according to the recommendations of the Nomination and Remuneration Committee- the annual remuneration for the members of the Board of Directors and its committees, according to the following regulations and principles:
a. Remuneration must be proportional to the business and responsibilities undertaken by the member, which he bears as a result of his membership and the sessions attended in the Board and its committees.
b. Remuneration is a motivating factor for the member towards achieving the visions and strategic objectives of the company.
c. Remuneration shall be in proportion to the company's activity, volume, required skills and experience for its management, development and sustainability of its business.
d. Remuneration must be reasonably sufficient to attract members of the board who are qualified with appropriate experience and motivating them.
Document Title: Remuneration Policy for the Board of Directors’ Members and its
Committees Al Rajhi Takaful
Issue Date: / / 2021 Review Date: / / 2024
Approval Authority:
BOD Board of Directors Signature & Date / / 2021
Approval Authority:
CEO Mahmoud Dahduli Signature & Date Approved on 12 / 12 / 2021
Policy Owner:
Director - Compliance Waeel Abdulaziz Al Murshed Signature & Date Approved on 29 / 11 / 2021
Policy Author: Director - Compliance | Waeel Abdulaziz Al Murshed
Reference: LC-CMP-11/21-003 Page 3 of 4
2.2. The table below indicates the minimum annual remuneration due for both the Chairman and the members of the Board of Directors or its committees, which is paid after the approval of the General Assembly. While the Board of Directors may determine otherwise that amount according to the recommendation of the Nomination and Remuneration Committee as follows:
Title Annual Remuneration
1 Chairman of Board of Directors SAR 200,000
2 Member of Board of Directors SAR 200,000
3 Chairman and members of the Audit Committee SAR 100,000 4 Chairman or member of the Board of Directors’
committees SAR 80,000
2.3. In addition to what was stated in Clause (2.2) above, the member of the Board of Directors is entitled to an allowance amounting to SAR 3,000 (three thousand Saudi Riyals) in consideration of attending each session of the Board meetings, whether he attended the session in person or through the use of any communication technology, to be agreed upon by the Board of Directors’ members.
2.4. In addition to what was stated in Clause (2.2) above, the member of the Board od Directors’ committees is entitled to an allowance amounting to SAR 1,500 (one thousand and five hundred Saudi Riyals) in consideration of attending each session of the committee meetings, whether he attended the session in person or through the use of any communication technology, to be agreed upon by the committee members.
2.5. In all cases, the total remuneration, financial and in-kind benefits, received by the Board of Directors’ member, must not exceed the limits prescribed in the company’s Articles of Association.
2.6. The company pays all the costs and expenses (including travel and accommodation expenses) incurred by the member of the Board/ member of the Board of Directors’ committees in order to attend the meetings of the Board or its committees, while these costs and expenses are not calculated from the annual remuneration.
2.7. The company does not grant any percentage of its net profit as a reward for any of the Board of Directors’
members.
2.8. The company does not grant any in-kind shares as a reward for any of the members of the Board of Directors or its committees
2.9. The Board of Director discloses in its annual report – according to the statuary requirements- the details of remuneration and policies related to them, as well as the mechanisms of determining them.
Document Title: Remuneration Policy for the Board of Directors’ Members and its
Committees Al Rajhi Takaful
Issue Date: / / 2021 Review Date: / / 2024
Approval Authority:
BOD Board of Directors Signature & Date / / 2021
Approval Authority:
CEO Mahmoud Dahduli Signature & Date Approved on 12 / 12 / 2021
Policy Owner:
Director - Compliance Waeel Abdulaziz Al Murshed Signature & Date Approved on 29 / 11 / 2021
Policy Author: Director - Compliance | Waeel Abdulaziz Al Murshed
Reference: LC-CMP-11/21-003 Page 4 of 4
3. SUSPENSION OF REMUNERATION AND/OR ITS REIMBURSEMENT
The disbursement of the remuneration, and/or its reimbursement for any member of the Board of Directors, and/or claiming for compensation against any damage that inflicted upon the company’s goodwill, shall be suspended when:
3.1. It is found that the remuneration disbursed to any of the members of the Board of Directors is based on any incorrect or misleading information that has been presented to the General Assembly, or included in the annual report of the Board of Directors. In such case, the member must reimburse it to the company, and the company shall have the right to claim paying it back.
3.2. In the event that the member did not attend the Board of Directors’ meetings for three consecutive times during one year without a legitimate excuse accepted by the Board, and the General Assembly decided terminating his membership. In that case, such member is not entitled to any remuneration for the period that follows the last meeting he attended and he must reimburse all the remuneration disbursed to him for that period.
D. REFERENCES
1. Corporate Governance Regulations 2021 (CMA).
2. Insurance Corporate Governance Regulations 2015 (SAMA).