6 questions asked at 2022 Monadelphous AGM

1. Did any of the 5 main proxy advisers - ACSI, Ownership Matters, Glass Lewis, ISS and ASA - recommend a vote against any of today's resolutions? Which of the proxy advisers are covering us and have there been any material proxy protest vote? Also, well done disclosing the proxies to the ASX with the formal addresses.

2. There was quite a big protest vote against the CEO's LTI grant. What was the issue raised by shareholders and proxy advisers?

3. Could the CEO summarise his past LTI grants as to whether they have vested or lapsed. Also, has he ever sold any ordinary shares in the company or bought any on market without relying on an incentive scheme to build his equity position in the company? Please don't say look it up in the annual report and through ASX announcements. It's complicated over many years and the CEO could factually summarise the situation in 30 seconds.

4. Given the interesting discussions across a range of topics today, could the chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website? The likes of Nine, AGL, ASX, ANZ, Domino's and Lend Lease all produced their 1st AGM transcripts in 2021. Will you follow suit today? This is something IAG has been doing since 2003.

5. It is very unusual to have such a long serving chair and CEO when neither owns more than 5% of the company. Congratulations to the chair for his record at the company but why have we moved to an executive chair model rather than having an independent non-executive chair?

6. Thank you to the chair for his service since first joining the board in 1991. It is always helpful for investors to have access to some exit perspectives from retiring directors. In his final contribution as a Monadelphous director, could the chair please comment on what he regards as the 3 best decisions Monadelphous made during his time on the board and does he have any regrets?

Below is the text of a post-AGM email from Kristy in the Monadelphous investor relations team:

Thank you for attending our 2022 Annual General Meeting online yesterday and for sending through your questions.

We often find that due to time constraints it is not possible to respond to all questions in the meeting, and we also sometimes amalgamate questions in order to remain efficient, but we do commit to responding to shareholder questions in writing after the meeting, so please find below our responses to the questions that you emailed us during the AGM.

Did any of the 5 main proxy advisers - ACSI, Ownership Matters, Glass Lewis, ISS and ASA - recommend a vote against any of today's resolutions? Which of the proxy advisers are covering us and have there been any material proxy protest vote? Also, well done disclosing the proxies to the ASX with the formal addresses.

All proxy advisor reports that we have seen (which were the ASA, ACSI, Ownership Matters, Glass Lewis, ISS reports) recommended shareholders vote in favour of all resolutions, with the sole exception being that ISS recommended voting against resolution 2, which was for the grant of retention rights to Mr Rob Velletri.

There was quite a big protest vote against the CEO's LTI grant. What was the issue raised by shareholders and proxy advisers?

Proxy advisor, ISS, recommended a vote against resolution 2, the grant of retention rights to Mr Velletri for the following reasons (as noted in their report):

• The retention rights are a one-off grant on top of the company's annual incentive program;
• The retention rights are calculated using fair value rather than face value, which is inconsistent with good governance practice as it obfuscates executive remuneration;
• The retention rights lack performance hurdles and are only conditioned upon the executive's continued employment, whereas investor expectations are that equity incentive be subject to performance hurdles aligned with strong long term performance; and
• The vesting period for the retention right are excessively short as the rights will vest in annual increments one year from the date of grant, with a third of the retention rights vesting one month after the annual meeting, noting that shares acquired are still subject to disposal restrictions.

While we will certainly take ISS' comments into account in the future, the award which was subject to this resolution had its own particular rationale. The last couple of years have seen us implement a number of employee-related cost reductions in response to COVID-19 impacts including salary reductions and freezes, while also putting a hold on the award of any short-term incentives. As a result, our key equity-based employee retention measures had become diluted. In response to the extremely competitive labour market which rapidly emerged post this period, we implemented an Employee Retention Plan to bolster the retention of our key employees. The plan provided a one-off issue of Retention Rights to around 180 key employees vesting over a three-year period, subject to continued service conditions.

The current Board transition which has occurred recently as a result of Mr Rubino's retirement has meant that Mr Velletri's ongoing retention with the Company is of critical significance and, accordingly, the Retention Rights offered to Mr Velletri are subject to a vesting condition that relates to his ongoing employment with the Company from the grant date to the relevant vesting date. It is also relevant to point out that later in the report ISS have also commented that the quantum of the retention rights awarded during the year was ‘modest and not excessive'.

In short, this modest award is a strong, one-off retentive measure to retain 180 key people (including Mr Velletri) in a manner best aligned to shareholders interests, in a very hot employment market.

Could the CEO summarise his past LTI grants as to whether they have vested or lapsed. Also, has he ever sold any ordinary shares in the company or bought any on market without relying on an incentive scheme to build his equity position in the company? Please don't say look it up in the annual report and through ASX announcements. It's complicated over many years and the CEO could factually summarise the situation in 30 seconds.

We hope this question was answered to your satisfaction in the meeting by Mr Velletri. Please feel free to request any clarifications you would like.

Given the interesting discussions across a range of topics today, could the chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website? The likes of Nine, AGL, ASX, ANZ, Domino's and Lend Lease all produced their 1st AGM transcripts in 2021. Will you follow suit today? This is something IAG has been doing since 2003.

We will publish a full recording of the AGM webcast on our website as soon as it is available from the webcaster.

It is very unusual to have such a long serving chair and CEO when neither owns more than 5% of the company. Congratulations to the chair for his record at the company but why have we moved to an executive chair model rather than having an independent non-executive chair?

Mr Velletri has more than 40 years of experience in the construction and engineering services industry, with over 30 of those with Monadelphous. In appointing Mr Velletri to the role of Executive Chair, the Board noted his thorough knowledge of the industry, the Company and its stakeholders, as well as his demonstrated commitment and dedication to Monadelphous as being critical to ensuring the Company's ongoing success. Whilst Mr Velletri is not independent, the Board believes that its current composition with its combined skills and capability, and its mix of experience, best serve the interests of shareholders. It is also relevant to point out that the Board has nominated a lead-independent, non-executive Deputy Chair in Ms Sue Murphy.

As an aside, Mr Velletri's predecessor, Mr Rubino, was also Executive Chair. This arrangement has served the Company well for over 20 years, and is well balanced by having a large proportion of independent, highly experienced non-executive directors on the Board.

Thank you to the chair for his service since first joining the board in 1991. It is always helpful for investors to have access to some exit perspectives from retiring directors. In his final contribution as a Monadelphous director, could the chair please comment on what he regards as the 3 best decisions Monadelphous made during his time on the board and does he have any regrets?

Unfortunately Mr Rubino is not very well and is in hospital at present and it is not possible to obtain his comments in response to this question. We are also intrigued to know the answer to this question when he recovers - we certainly hope he doesn't have any regrets!

We hope this assists with your queries. Thank you for your interest and support of Monadelphous. Please feel free to come back to me if you would like any further clarification.

Kind regards,
Kristy

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