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Remuneration for Members of Boards of Directors of Financial Institutions

No: 45048798 Date(g): 4/2/2024 | Date(h): 25/7/1445 Status: In-Force

Translated Document

Referring to the authority of SAMA to issue instructions related to financial institutions and their operations in accordance with the provisions of its law issued by Royal Decree No. (M/36) dated 11/04/1442H and referring to the provisions related to the remuneration of board members included in The Companies Law issued by Royal Decree No. (M/132) dated 01/12/1443 H, and its implementing regulations issued by the Ministry of Commerce and the Capital Market Authority.

Accordingly, SAMA emphasizes that financial institutions under its supervision must adhere to the aforementioned provisions when determining and disbursing rewards the remuneration for the members of the Board of Directors and its committees, in addition to the following regulations:

  1. Remunerations should align with the institution's long-term financial goals, comply with prevailing local customs, and be in line with the institution's financial risk policy.

  2. The policy of "Board of Directors and its Committees' Remunerations" should set an upper limit for the remuneration.

  3. Members of the Board of Directors are not allowed to vote on the "Board of Directors' remuneration" item in the General Assembly meeting.

  4. To provide SAMA with a report on the "total remunerations of board members and its committees" at the end of March each year according to the form attached to this circular.

For your information and action accordingly, please update the policy on "Board of Directors and Committee Member Remunerations" in accordance with the provisions contained in these regulations within (90) days from its date. Please note that these instructions replace SAMA's instructions previously issued regarding the remuneration for chairs and members of boards of directors of local banks, insurance companies and reinsurance companies under Circular No. (381000063670) dated 14/06/1438 H. Additionally, an electronic copy of the Total Remunerations Report Template for the Board of Directors and its committees will be shared with you via email, along with the designated addresses for its regular receipt.