Noble responds to SGX queries on corporate governance report, full-year results

IN response to queries by the Singapore Exchange (SGX), embattled commodities trader Noble Group has clarified that it did not fully disclose remuneration details of its key management personnel due to competitive industry conditions, and the sensitivity and confidentiality of such matters.

It noted that many of its competitors are privately owned, and do not publish remuneration information.

"The company believes that the disclosure of the aggregate remuneration paid to the top five key management personnel, and the remuneration of individual top five key management personnel in the remuneration bands as recommended by the code would be disadvantageous to the company and its subsidiaries as a whole."

Noble further clarified that it has delegated authority to its Remuneration and Options Committee to approve its remuneration policies and packages.

Among other things, the committee also reviews the company's obligations arising in the event of termination of its key management personnel, "to ensure that such contracts of service contain fair and reasonable termination clauses which are not overly generous".

On Wednesday, Noble also issued a separate clarification to queries from the SGX on its full-year results ended Dec 31, 2017.

For discontinued operations, the group said that "other emoluments" of US$16.7 million and share-based payments of US$3.5 million incurred in FY2017 were related to termination arrangements made in respect of the former CEO of Noble Americas Corp (NAC), Jeff Frase, who resigned in November last year.

It added that Mr Frase had been responsible for building the oil liquids business of NAC and, when the business shrank due to a lack of continuing bank support, a decision was taken to sell the business in "as controlled a manner as possible, optimising price, time and execution risk".

As part of their support and forbearance for NAC during the sale process, and in order to keep the business stable, the banks required the company to pay US$20 million in retention payments to senior NAC staff, which were made in June 2017.

"In addition to being the key driver growing the US oil business, the CEO played a leading role in identifying and approaching candidates to acquire the business and in leading presentations and site visits and maximising the considerations received on this complex and sizeable transaction," Noble said.

With respect to the share-based payment expense, the company said that it awards shares to its senior executives and they vest over a period.

"When the CEO left NAC, the shares he had been awarded but had not vested at the time of his departure, were retained by the CEO, in accordance with contractual arrangements, and will vest in the normal course of the applicable share plan."

Last month, Noble announced a loss of US$4.9 billion for 2017. The group recorded a net profit of US$8.7 million in 2016. Revenue tumbled 26 per cent to US$6.43 billion, from US$8.67 billion in 2016, as traded volumes dropped due to constraints in trade finance and liquidity.

Shares in Noble last traded 8.39 per cent higher to close at 16.8 Singapore cents apiece on Wednesday. Some 21.7 million shares exchanged hands.