REMUNERATION

REMUNERATION POLICY

OBJECTIVE

The objective of this policy is to organize the remunerations in a way to attract Board and Committee members with the appropriate scientific, technical, and management expertise, and incentivize them to carry out their roles with the required professionalism and efficiency, taking into consideration SABIC’s business environment and its required skills and capabilities.

The company aims to create an attractive environment to attract and retain talents with required skills and expertise to ensure sustained growth and achievement of the company’s vision. It maintains a remuneration framework for Executive Management that is consistent with the relevant rules, legislation, and best practices.

REMUNERATION PRINCIPLES

Considering the provisions governing the remuneration of the Board of Directors and board committees as stipulated in Companies Law, the Corporate Governance Regulations, the organizational controls and procedures issued in implementation of the Companies Law of the listed joint stock companies, and the Company’s Articles of Association, the remuneration of the members of the Board of Directors, its committees and senior executives, shall be in accordance with the following principles and rules:

A. Board and Committee members

- The Board, based on the recommendations of the Remuneration and Nominations Committee, determines the remuneration of Board members and Committee members based on the following principles:

• The remuneration shall be consistent with the company’s strategic objectives and an incentive factor for the members to achieve these objectives and enhance the company’s ability to develop and sustain its business.
• Remunerations should be based on the nature of the company’s business and its size as well as the skills and experience required.
• The remunerations should be a means to attract Board members with the relevant expertise and qualifications to enhance the company’s ability to achieve its objectives.

– Board members are entitled to an annual remuneration not exceeding SAR 200,000 for their membership of the Board. The Board may determine different amounts of such remuneration based on recommendations from the Remuneration and Nominations Committee.

– Board members who are participating in Board committees (including the Audit Committee) are entitled to annual remuneration not exceeding SAR 300,000, whether the member is participating in one or several Committees. The Board may decide otherwise based on the recommendations of the Remuneration and Nominations Committee.

– Committee members (including the Audit Committee) from outside the Board are entitled to annual remuneration of SAR 200,000.

– The company is entitled to claim compensation for damage to its reputation and should take any compensation, or other costs incurred by the company, in the event of:

• Committing an act of dishonesty, forgery, or violating the laws and regulations of the Kingdom of Saudi Arabia or any other country.
• Failure to carry out responsibilities and duties resulting in damage to the interests of the company.
• Termination of membership by a decision of the General Assembly – for being absent from three consecutive meetings within one year without a legitimate excuse acceptable to the Board.

B. Executive Management

– Based on the recommendation of the Remuneration and Nominations Committee, the Board specifies Executive Management’s remuneration according to the following principles: Remuneration and compensation should:

• Be commensurate with the company’s strategic objectives and be a motivating factor for Executive Management to meet these objectives and enhance the company’s ability to grow and sustain its business.
• Be commensurate with the nature of the company’s business and size as well as with the required skills and experience.
• Enable the company to attract senior executives with skills and qualifications necessary to enable the company to meet its objectives.
• Not cause conflict of interest which might adversely impact the company’s interests and ability to achieve its objectives.

REMUNERATIONS PAID DURING 2019

The annual remuneration of the Board is disbursed after the approval of the general assembly of SABIC’s shareholders. Annual remuneration amounts for the Board members representing the Government (through PIF) are paid to PIF as decided by the Council of Ministers. The aggregate total remuneration paid by SABIC to the members of the Board (including for their membership and/or chairing of Board committees) for the year ended 31 December 2019 is set out below (in SAR):

Important Note:
1. The Specific amount is the annual remuneration for membership of the Board of Directors for the year 2018. It was disbursed after the approval of the General Assembly in April 2019. The annual remuneration for membership of the Board for 2019 will be disbursed after the approval of the General Assembly scheduled in April 2020.
2. Member joined the Board of Directors on 18 April, 2018.
3. For the members representing the Government in the Board of Directors, the annual remuneration amounts for the membership of the Board of Directors and the attendance allowance of the Board sessions related to them shall be paid to the Public Investment Fund annually on the basis of the decision of the Council of Ministers.
4. Member ended his membership of the Board of Directors and Committees on 10 April 2019.
5. Members joined membership of the Board of Directors and Committees on 10 April 2019.

The aggregate total remuneration paid by SABIC to the Committee members for the year ended 31 December 2019 is set out below (SAR):

Important Note:
6. Member ended his membership of Audit Committees on 10 April 2019.
7. Joined the Audit Committee on 10 April 2019.
8. Member ended his membership of the Remunerations and Nominations Committee on 11 April 2019.
9. Joined the Remunerations and Nominations on 11 April 2019.
10. Member ended his membership of the Investment Committee on 10 April 2019.
11. Joined the Investment Committee on 11 April 2019.
12. Member ended his membership of the Risk and Sustainability Committee on 11 April 2019.

The aggregate total remunerations paid by SABIC to five Executives who have received the highest remuneration, including the CEO and CFO, for the year ended 31 December 2019 set out below (SAR ):