Petronas

The Problem

The Remuneration Committee wanted to introduce market-based long-term incentives but was constrained by public finance responsibilities, the importance of Petronas to Malaysian economy, inability to offer employee equity, inertia amongst incumbent management, valuation of the organisation.

How we helped?

Rem.n London were selected as independent advisors to the Remuneration Committee on the basis of experience at similar firms and design experience in large unlisted companies

Design Work

Developed a synthetic value-based performance unit plan which became known as the Petcoin programme. Coins allocated to executives (on the basis of position and performance) gain in value tied to independent external valuation conducted annually by Arctic Securities (PM also contributed to selection of Norwegian Valuation team). The plan incorporated a unique ‘Custodian Adjustment’ to reflect Petronas’ special role, and special performance requirement

Challenges/Complex requirements

This was a multi-department (HR, Planning, Finance, Secretariat) effort over many years. We worked with both the Remuneration Committee as well as the Board, the HRM team and Arctic Securities.