ST Engineering Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 (CURRENCY – SINGAPORE DOLLARS UNLESS OTHERWISE STATED) D4 Share-based payment arrangements PSP2010 and PSP2020 (PSP) The PSP is established with the objective of motivating Senior Management Executive to strive for sustained long-term growth and performance in ST Engineering and its subsidiaries (ST Engineering Group or the Group). Awards of performance shares are granted conditional on performance targets set based on the ST Engineering Group corporate objectives. The performance measures used in PSP grants are Absolute Total Shareholder Return (TSR) against Cost of Equity hurdles (i.e. measure of absolute Wealth Added); and Earnings Per Share (EPS) Growth against pre- determined targets. In addition to the PSP performance targets being met, final award for PSP is conditional upon satisfactory performance of the recipient. RSP2010 and RSP2020 (RSP) The RSP is established with the objective of motivating managers and above to strive for sustained long-term growth of ST Engineering Group. It also aims to foster a share ownership culture among employees within the ST Engineering Group and to better align employees’ incentive scheme with shareholders’ interest. A minimum threshold performance is required for any shares to be released to the recipients at the end of the performance period. The shares will vest equally over a four-year performance period, subject to continued employment with the Group and maintaining a satisfactory performance rating for the financial year preceding each tranche of vesting. Movement in the number of shares under the PSP and RSP are as follows: Group 2020 2019 PSP RSP PSP RSP Outstanding awards Balance at 1 January 4,896,009 13,308,887 4,818,034 12,501,287 Granted 3,458,270 6,705,899 2,280,194 6,594,486 Lapsed (430,932) (790,203) (160,722) (580,892) Released (2,377,103) (5,962,544) (2,041,497) (5,205,994) Balance at 31 December 5,546,244 13,262,039 4,896,009 13,308,887 These shares were awarded by reissuance of treasury shares. 23 5 ANNUAL REPORT 2 0 2 0 / CORPORATE OVERVI EW PERFORMANCE REVI EW SUSTAINABI L ITY CORPORATE GOVERNANCE F INANCIAL REPORT