REMUNERATION

REMUNERATION POLICY

OBJECTIVE

The objective of this Policy is to organize remuneration in a manner that attracts board and committee members having appropriate scientific, technical, and managerial expertise; and enable them to carry out their roles with the required professionalism and efficiency, taking into consideration SABIC business environment and 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 its vision. This is maintained through the Company’s remuneration framework for Executive Management that is consistent with the relevant regulations, legislation, and best practices.

REMUNERATION PRINCIPLES

Considering the provisions governing the remuneration of members of the Board of Directors and board committees – as stipulated in Companies Law, the Corporate Governance Regulations, the “Regulatory Rules and Procedures issued pursuant to the Companies Law relating to Listed Joint Stock Companies”, and the Company's By-Laws –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 recommendation of the Remuneration and Nomination 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, act as an incentive for the members to achieve these objectives, and enhance the company’s ability to develop and sustain its business.
• The remuneration shall 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 right expertise and qualifications to enhance the company’s ability to achieve its objectives.

– The Board of Directors, based on the recommendation of the Remuneration and Nomination Committee, determines the remuneration of the Chairman and its members in the manner it deems appropriate, provided the total remuneration, financial or in-kind benefits and rewards that a member of the Board of Directors receive does not exceed an amount of one million eight hundred thousand (1,800,000) Saudi riyals annually. If the amount exceeds that limit, it must be presented to the General Assembly to decide as it deems appropriate.

– A member of a Board committee (including the Audit Committee), who is not a member of the Board, is entitled to an annual remuneration of SR 200,000.

– The Company is entitled to claim compensation for damage to its reputation, and recover any paid remuneration, compensation, or other costs it incurred, in the event that the member:

• Commits an act of dishonesty or breach of trust, forgery, or violation of the laws and regulations of the Kingdom of Saudi Arabia or any other country.
• Fails to carry out his/her responsibilities and duties resulting in damage to the interest of the company.
• Membership is terminated 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 Nomination Committee, the Board specifies Executive Management’s remuneration according to the following principles:

• 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.
• Should be commensurate with the nature of the company’s business and size as well as with the required skills and experience.
• Enables the Company to attract senior executives with skills and qualifications necessary to enable the Company to meet its objectives.
• Should not cause conflict of interest which may adversely impact the Company’s interest and ability to achieve its objectives.

REMUNERATIONS PAID DURING 2020 (IN SAR)

The aggregate total remuneration paid by SABIC to the members of the Board (including their chairmanship and/or membership Board committees) for the year ended December 31, 2020, is set out below:

Important Note:
1. The Specific amount is the annual remuneration determined for membership of the Board of Directors for the years 2019 and 2020. The amount for the year 2019 was disbursed after the approval of the General Assembly held in April 21, 2020.
2. Members of the Board of Directors representing the government will have their annual remuneration amounts – covering their membership of the Board of Directors and the allowance for attending the Board meetings– paid to the account of the Public Investment Fund for the period of their representation. The allowance for their attendance of the Board meetings covers that of 2019 and 2020.
3. Members who resigned from Board on June 16, 2020.
4. Members who joined the Board on June 16, 2020.

Remuneration of committee members for the year ended December 31, 2020 is set out below:

The aggregate total remunerations paid by SABIC to five executives who received the highest remuneration, including the CEO and CFO, for the year ended December 31, 2020, are as below: