Mandarin Oriental International Limited - Mandarin Oriental Hotel ...

The Board (continued)
information for each of its meetings, which has previously been considered and approved at meetings of the board
of MOHG.This information is also the subject of a strategy review in a cycle of meetings (in Bermuda or Asia, as
appropriate) prior to consideration by the Board itself.
Directors’ appointment, retirement, remuneration and service contracts
Candidates for appointment as executive Directors of the Company, or as directors of MOHG or senior executives
elsewhere in the Group may be sourced internally, from the Jardine Matheson group or externally using the services
of specialist executive search firms.The aim is to appoint individuals of the highest calibre in their area of expertise.
In accordance with Bye-law 92 of the Company’s Bye-laws, each new Director is subject to retirement at the first
Annual General Meeting after appointment.Thereafter, the Director will be subject to retirement by rotation
pursuant to Bye-law 85 whereby one-third of the Directors retire at the Annual General Meeting each year. These
provisions apply to both executive and non-executive Directors, but the requirement to retire by rotation pursuant
to Bye-law 85 does not extend to the Chairman or Managing Director.
On 1st April 2006,AJLNightingale succeeded Percy Weatherall as Managing Director. In accordance with
Bye-law 85, Henry Keswick, RC Kwok, Sydney SWLeong and Percy Weatherall retire by rotation at the Annual
General Meeting and, being eligible, offer themselves for re-election. In accordance with Bye-law 92,
AJLNightingale will also retire, and, being eligible, offers himself for re-election. None of the Directors
proposed for re-election has a service contract with the Company or its subsidiaries.
The Company’s policy is to offer competitive remuneration packages to its senior executives. It is recognized that,
due to the nature of the Group and its diverse geographic base, a number of its senior executives, including the
Group Chief Executive and Finance Director, are required to be offered international terms.The nature of the
remuneration packages is designed to reflect this, for example by the provision of accommodation. Non-executive
Directors’ fees are decided upon by shareholders in general meeting as provided for by the Company’s Bye-laws.
For the year ended 31st December 2005, the Directors received from the Group US$3.33 million (2004:
US$2.80 million) in employee benefits, being US$3.28 million (2004: US$2.76 million) in short-term employee
benefits including salary, bonus, accommodation and deemed benefits in kind and US$0.05 million (2004:
US$0.04 million) in post-employment benefits.The information set out in this paragraph forms part of the audited
financial statements.
A motion to increase the Directors’ fees to US$25,000 each per annum and the fees for the Chairman and Managing
Director to US$30,000 each per annum, save that salaried executives shall not be eligible for such fees, with effect
from 1st January 2006 will be proposed at the forthcoming Annual General Meeting.
Senior executive share incentive schemes have previously been established to provide longer-term incentives for
executive Directors and senior managers.The share options are granted by the scheme trustee after consultation
between the Chairman, the Managing Director and the Group Chief Executive and other Directors as they consider
appropriate.The share options are granted at the then prevailing market prices and the scheme rules now provide
that they normally vest after the third anniversary of the date of grant. Grants may be made in a number of
instalments. Share options are not granted to non-executive Directors.
The Company purchases insurance to cover its Directors against their costs in defending themselves in civil
proceedings taken against them in that capacity and in respect of damages resulting from the unsuccessful defence of
any proceedings.To the extent permitted by law, the Company also indemnifies its Directors. Neither the insurance
nor the indemnity provides cover where the Director has acted fraudulently or dishonestly.
ANNUAL REPORT 2005 75