Directors’ Report – Remuneration Report The total aggregate amount of fees which may be paid to Non-executive Directors by the Parent Company is subject to the approval of Shareholders in a general meeting and is currently set at $2,000,000 per annum. Approval for this total aggregate amount was given at the 2016 Annual General Meeting. During the year ended 31 July 2021 remuneration of the Non-executive Directors by the Parent Company and unlisted controlled entities amounted to $1,597,892. With effect from 31 July 2004 the retiring allowance for Non-executive Directors was frozen at three times the average annual fees for the three years prior to that date. Non-executive Directors appointed after 31 July 2004 do not qualify for a retiring allowance. Mr Robert Millner is the only Director entitled to a retiring allowance. Executive Key Management Personnel Remuneration Fixed Remuneration Fixed remuneration for senior executives is set annually (or on promotion if applicable) by the Remuneration Committee. It is benchmarked against market data for comparable roles in companies with similar characteristics and market capitalisation. Fixed remuneration comprises a cash salary, superannuation and other non-cash benefits where taken. Short term incentives Structure of short term incentives The STI plan is designed to motivate and reward senior executives to generate increasing net cash flow (to facilitate increasing dividends) and to grow the value of the investment portfolio (measured by net asset value) for the benefit of shareholders. Feature Description STI pool Based on target performance 50% of Managing Director’s fixed remuneration 40% of Chief Financial Officer’s fixed remuneration 20% of Group Executive Legal and Governance’s fixed remuneration 10% of the fixed remuneration of other participants in the plan The size of the pool is determined by the performance metrics below, in the event that the targets are exceeded (performance metrics exceed 100%) the pool will be increased as set out below. Determination of STI pool The pool determination metrics align with WHSP’s strategic goals to maximise shareholders’ returns. Objective Regular cash to the parent company net of regular expenses Weighting Threshold (80%) Target (100%) Outperformance 50% > 0% and < 4% higher than previous year 4% to < 5% higher than previous year 5% to < 6% = 110% 6% to < 7% = 120% 7% to < 8% = 130% 8% to < 9% = 140% 9% and higher = 150% As dividends are paid out of parent company cash, increasing net cash inflows enable the payment of increasing dividends. Adjusted net asset value (post tax) per share 50% (adjusted by adding back dividends paid by the parent company) > 0% and < 2% higher than ASX200 Accumulation Index 2% to < 3% higher than ASX200 Accumulation Index 3% to <4% = 110% 4% to < 5% = 120% 5% to < 6% = 130% 6% to < 7% = 140% 7% and higher = 150% Increases in net asset value per share drive increases in the WHSP share price. 58 Washington H. Soul Pattinson and Company Limited Annual Report 2021