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Ascott Residence Trust
Annual Report 2015
Corporate Governance
Therefore, with effect from FY 2016, the Board will undertake the functions of a remuneration committee and
the Manager will continue to not have a separate remuneration committee. The Board will perform the functions
that such a committee would otherwise perform, namely, to oversee the design and implementation of the
remuneration policy and the specific remuneration packages for each Director and senior executives including
the CEO. No member of the Board will be involved in any decision of the Board relating to his own remuneration.
In terms of the process to be put in place by the Manager for developing policies on remuneration and determining
the remuneration packages for Directors and executive officers, the Manager will, through an independent
remuneration consultant, take into account benchmarking within the industry, as appropriate. It may also consider
the compensation framework of CL as a point of reference. The Manager is a subsidiary of CL which also holds a
significant stake in Ascott Reit. The association with the CL Group puts the Manager in a better position to attract
and retain better qualified management talent; it provides an intangible benefit to the Manager such that it allows its
employees to associate themselves with an established corporate group which can offer them depth and breadth
of experience and a career horizon. Following the issuance of new MAS directions and guidelines relating to the
remuneration of its key executives, the Manager has begun the process of reviewing its remuneration policy with a
view to adopting a policy which is in line with the new MAS directions and guidelines.
The principles governing the Manager’s key management personnel remuneration policy are as follows:
Business Alignment
• Focus on generating income and enhancing asset value over time so as to maximise returns from investments
and ultimately the distributions and total returns to Unitholders
• Provide sound, structured funding to ensure affordability and cost-effectiveness in line with performance goals
• Enhance retention of key talents to build strong organisational capabilities
Motivate Right Behaviour
• Pay for performance – align, differentiate and balance rewards according to multiple dimensions of performance
• Strengthen line-of-sight linking rewards and performance goals
Fair & Appropriate
• Ensure competitive remuneration relative to the appropriate external talent markets
• Manage internal equity such that remuneration systems are viewed as fair
• Significant and appropriate portion of pay-at-risk, taking into account risk policies of Ascott Reit Group,
symmetrical with risk outcomes and sensitive to the risk time horizon
Effective Implementation
• Maintain rigorous corporate governance standards
• Exercise appropriate flexibility to meet strategic business needs and practical implementation considerations
• Facilitate employee understanding to maximise the value of the remuneration programmes
The fixed component comprises the base salary, fixed allowances and compulsory employer contribution to an
employee’s Central Provident Fund. The variable cash component comprises an annual bonus plan which is linked
to the achievement of annual performance targets for each key executive. Annual performance targets are in the
form of both quantitative and qualitative measures and are aligned to the business strategy for Ascott Reit Group
and linked to the performance of Ascott Reit. The market-related benefits provided are comparable with local
market practices.
