All decisions at any meeting of the ERCC are decided by a majority of votes of the ERCC members present and voting (the decision of the ERCC shall at all times exclude the vote, approval or recommendation of any member who has a conflict of interest in the subject matter under consideration). Under its terms of reference, the ERCC performs the following duties and responsibilities: Executive Remuneration General Framework • Reviews and recommends to the Board the Group’s general framework for determining executive remuneration including the remuneration of the Group President & CEO, Key Management Executives and other senior management executives (collectively referred to as “Senior Management Executives”). Executive Director and Senior Management Executives • Reviews and recommends to the Board the entire specific remuneration package and service contract terms for the Group President & CEO, who is also the executive Director. • Considers, reviews, approves and/or varies (if necessary) the entire specific remuneration packages and service contract terms for the Senior Management Executives of the Group. For FY2022, the Board reviewed and approved the specific remuneration packages and service contract terms for the Key Management Executives. Non-Executive Director Remuneration • Reviews and recommends to the Board the remuneration framework (including Directors’ fees) for non-executive Directors. Equity-based Plans • Approves the design of equitybased plans and reviews and administers such plans. Executive and Leadership Development • Oversees the development of Management with the aim of a continual build up of talent and renewal of strong and sound leadership to ensure the continued success of the Group and its businesses. • Approves appointments to Senior Management Executive positions within the Group. For FY2022, Aon Solutions Singapore Pte Ltd (Aon) was engaged as remuneration consultant (Remuneration Consultant) to provide professional advice on Board and executive remuneration matters. Aon and its principal consultant are independent and are not related to the Group or any of its Directors. Executive Remuneration Structure Remuneration for the Senior Management Executives comprises a fixed compensation, variable cash-based incentives, sharebased incentives and marketrelated benefits. A. Fixed Compensation: The fixed compensation comprises the base salary and compulsory employer’s Central Provident Fund (CPF) contributions. B. Variable Cash-based Incentives: The variable cash-based incentives include the Performance Target Bonus (PTB) and EVA-based Incentive Scheme. Performance Target Bonus The PTB is a cash-based incentive for Senior Management Executives which is linked to the achievement of annual performance targets that will vary depending on their job requirements. Individual performance objectives are set at the beginning of each financial year. The performance targets are in financial, people, operational, customer and sustainability areas aligned to the business’ strategic goals. These objectives are cascaded down to a select group of key executives creating alignment between the performance of the Group, Company and the individual. The individual PTB payouts for the Group President & CEO and Key Management Executives are determined by the ERCC based on the Group’s, Company’s and individual performance at the end of the financial year. CORPORATE GOVERNANCE REPORT ERCC met 3 times in 2022 90 ST ENGINEERING ANNUAL REPORT 2022
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