CORPORATE GOVERNANCE REPORT Cash Remuneration for Key Management Executives KME Salary1 % Variable cash-based incentives2 % Benefits3 % Total Cash Remuneration % Members of the EXCO (excluding Group President & CEO) 28% 68% 4% 100% Total Cash Remuneration for KME ($): 10,507,076 Share Remuneration for Key Management Executives Contingent Grant under RSP20204 No. of Shares (vesting of 0 - 100% shares over 4 years based on ROCE KPI) 522,169 restricted shares to be granted for FY2024 (Fair value per share: S$4.24) Contingent Grant under PSP20205 No. of Shares (vesting of 0 - 170% shares after 3 years based on Absolute TSR & EPS KPIs) 700,632 performance shares to be granted for FY2024 (Fair value per share: S$3.16) Contingent Grant under PSP20206 No. of Shares (vesting of 0 – 170% shares after 6 years based on Absolute TSR, EPS and ESG KPIs) 142,856 performance shares to be granted for FY2024 (Fair value per share: S$2.80) 1 Salary includes base salary and employer CPF for FY2024. 2 Variable cash-based incentives include Performance Target Bonus & EVA-based incentive declared. 3 Benefits provided for employees are comparable with local market practices. These include medical, dental, insurances, transport, etc. 4 This conditional award is subject to a performance target set over a one-year performance period. If the performance target is attained, the restricted shares comprised in this conditional award will be released according to the stipulated vesting periods. The restricted shares will vest annually over four years, subject to the recipient’s continued employment with the Group and maintaining a satisfactory performance rating for the financial year preceding each tranche of vesting. 5 A minimum threshold performance over a three-year period is required for any performance shares to be released and the actual number of performance shares to be released is capped at 170% of the conditional award. 6 A minimum threshold performance over a six-year period is required for any performance shares to be released and the actual number of performance shares to be released is capped at 170% of the conditional award. Provision 8.1(b) of the Code provides, inter alia, that the names, amounts and breakdown of remuneration of at least the top five key management personnel (who are not Directors or the chief executive officer) be disclosed in bands no wider than $250,000. The Board has deliberated this matter carefully and has decided it is in the interests of the Company not to disclose the individual remuneration of the KME (excluding the Group President & CEO), having considered the confidential and commercial sensitivities associated with remuneration matters and the highly competitive conditions for talents in the industry. The Board believes that notwithstanding the deviation from Provision 8.1(b) of the Code, taken as a whole, the remuneration disclosures set out in this Corporate Governance Report are meaningful and sufficiently transparent in giving an understanding of the remuneration of the Company’s key management, the Company's remuneration policies, level and mix of remuneration, the procedure for setting remuneration and the relationships between remuneration, performance and value creation. ACCOUNTABILITY AND AUDIT Risk Management and Internal Controls (Principle 9) The Board is responsible for the governance of risk and ensures that Management maintains a sound risk management and internal control system to safeguard the interests of the Company and its shareholders. The Board received a written assurance from the Group President & CEO and the Group CFO that the financial records have been properly maintained and the financial statements give a true and fair view of the Company’s operations and finances. Risk and Sustainability Committee Song Su-Min (Chairman) VADM Aaron Beng Yao Cheng Vincent Chong Sy Feng Kevin Kwok Khien Neo Gim Huay The Risk and Sustainability Committee (RSC) has been established to ensure Management has adequate oversight over the awareness and handling of safety, risks and sustainability matters. 94 ST ENGINEERING | ANNUAL REPORT 2024
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