GENCO SHIPPING & TRADING LTD

In support of Genco’s commitment to align compensation with demonstrated performance, a significant portion of the compensation paid to its named executives is incentive-based. Genco’s incentive compensation program has been designed to recognize scope of responsibilities, reward demonstrated performance and leadership, motivate future performance, align the interests of the executive with Genco’s shareholders and retain the executives through the term of the equity awards, which has historically been for three to five years. Under Genco’s current compensation framework, variable incentive compensation in the forms of cash and restricted stock units is awarded to Genco’s named executives based on performance relative to certain metrics recommended by the Compensation Committee and approved by the Board.

Cash Incentive Awards. For purposes of determining the amounts of cash bonuses payable to our named executive officers and other employees, the Compensation Committee recommended, and the Board approved, the Annual Incentive Plan described below.

Equity Awards. Genco does not have a specific policy governing the timing of equity awards but intends to make equity awards for a given year in the first quarter of the year. Under the current compensation framework, these awards consist of RSUs that generally vest over a period of time and PRSUs that vest based on achievement of certain metrics following completion of a measurement period. Each RSU or PRSU awarded by Genco represents the right to receive one share of the issuer’s common stock, or in the sole discretion of our Compensation Committee, the value of a share of common stock on the date that the RSU or PRSU vests. The Compensation Committee considers the size and form of award when making award decisions.

Historically, unless otherwise determined by Genco’s Compensation Committee, each RSU or PRSU award entitles the named executive to dividend equivalent rights. As the executives share commensurately with other shareholders in receiving payments in respect of dividends, they likewise share in the recognition of the current income generation and future change in stock price. Recipients of RSUs or PRSUs receive dividend equivalent payments only upon settlement of these awards after they vest, and any dividend equivalent payments that have accrued in respect of forfeited RSUs or PRSUs are likewise forfeited.