to the participant, and to exercise the right to clawback the monetary value of shares which have been released to the participant within a six-year clawback period, if certain exceptional circumstances occur in relation to that participant. Such exceptional circumstances include: • The grant of the relevant award being based on inaccurate financial statements; • The participant having engaged in conduct which resulted in or contributed to any financial loss or reputational harm to the Company or the Group; and • The participant having engaged in misconduct or committed fraud or breach of trust or duty in relation to the Company or the Group. The number of shares comprising awards granted under the 2020 Share Plans during FY2024 did not exceed 0.5% of the total number of issued shares of the Company (excluding treasury shares and subsidiary holdings), which is the yearly limit set by the ERCC for the 2020 Share Plans. The aggregate number of shares issued and/or to be issued and the aggregate number of existing shares (including treasury shares) delivered and/or to be delivered, pursuant to the 2020 Share Plans, is limited to 5% of the total number of issued shares of the Company (excluding treasury shares and subsidiary holdings). Details of the abovementioned share plans and grants are set out in the Share Plans section of the Directors’ Statement from pages 117 to 120 of this Annual Report. CORPORATE GOVERNANCE REPORT Under the plan, a portion of EBIS bonus declared for the financial year will be paid out annually, while the remaining portions will be deferred in an EVA bank. Amounts in the EVA bank are at risk because negative EVA will result in a clawback of EVA accumulated in the bank. This mechanism encourages the Senior Management Executives to work for sustained EVA generation and to adopt strategies that are aligned with the long-term interests of the Group. In addition, the Group has a clawback facility with respect to the EVA bank in the event of a restatement of the financial results of the Group subsequent to an earlier misstatement, and provisions for the forfeiture of the remaining EVA bank balance on termination due to misconduct or fraud resulting in any financial loss to the Group. The ERCC has determined that the Group has met the EVA targets set for FY2024. C. Share-based Incentives: Share awards were granted in FY2024 pursuant to the Singapore Technologies Engineering Performance Share Plan 2020 (PSP2020) and the Singapore Technologies Engineering Restricted Share Plan 2020 (RSP2020 and together with the PSP2020, the 2020 Share Plans) which were approved and adopted by shareholders of the Company at the 23rd AGM held on 15 May 2020. The 2020 Share Plans have malus and clawback rights which allow the ERCC to cancel all or part of any award to the extent not yet released PSP2020 The objective of the PSP2020 is to motivate Senior Management Executives to strive for sustained growth and performance of the Group. Performance share awards are generally granted on an annual basis and are conditional on the Group meeting targets set for a three-year performance period. The performance measures used in performance share grants are: • Absolute Total Shareholder Return (TSR) taking reference to the Group’s Cost of Equity; and • Earnings Per Share (EPS) growth against predetermined EPS growth targets. Beginning FY2024, performance share awards may also be granted to selected senior leaders which are conditional on the Group meeting targets set for a six-year performance period. Apart from Absolute TSR and EPS performance measures, such awards will also include additional performance measures based on Environment, Social & Governance (ESG) metrics. A minimum threshold performance is required for any shares to be released at the end of the applicable performance period. The actual number of performance shares released will depend on the achievement of predetermined performance targets over the applicable performance period, capped at 170% of the shares granted. The release of the shares is also conditional on satisfactory individual performance at the end of the performance period. 88 ST ENGINEERING | ANNUAL REPORT 2024
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