Overview Leadership Portfolio & Performance Sustainability & Governance Financial Statements and Other Information Fair & Appropriate › Ensure competitive remuneration relative to the appropriate external talent markets › Manage internal equity such that remuneration is viewed as fair across the Stapled Group › Significant and appropriate portion of pay-at-risk, taking into account risk policies of the Stapled 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 programme These remuneration policies are in line with CLAS’ business strategy and the executive compensation framework is based on the key principle of linking pay to performance, which is emphasised by linking total remuneration to the achievement of business and individual goals and objectives. The NRC considers all aspects of remuneration, including termination terms, to ensure they are fair, and has access to remuneration consultants for advice on remuneration matters as required. In reviewing policies on remuneration and determining the remuneration packages for key management personnel, the NRC, through an independent remuneration consultant, takes into consideration appropriate compensation benchmarks within the industry, so as to ensure that the remuneration packages payable to key management personnel are competitive and in line with the objectives of the remuneration policies. It also considers the compensation framework of CLI as a point of reference. The Managers are subsidiaries of CLI which also holds a significant stake in CLAS. The association with the CLI Group puts the Managers in a better position to attract and retain better qualified management talent. Additionally, it provides an intangible benefit to the Managers in that it allows the employees to associate themselves with an established corporate group which can offer them the depth and breadth of experience and enhanced career development opportunities. In FY 2023, Willis Towers Watson was appointed as independent remuneration consultant to provide professional advice on executive remuneration. Willis Towers Watson is a leading global advisory, broking and solutions company with over 46,000 employees serving more than 140 countries and markets. The consultant is not related to the Managers, their controlling shareholder, their related corporations or any of their Directors. Remuneration of Key Management Personnel The remuneration of key management personnel comprises fixed components, a variable component, long-term components and employee benefits. A significant proportion of key management personnel’s remuneration is in the form of variable compensation, awarded in a combination of short-term, deferred and long-term incentives, in keeping with the principle that the interests of the key management personnel should be aligned with those of Stapled Securityholders and that the remuneration framework should link rewards to business and individual performance and promote the long-term success of CLAS. A Fixed Components: The fixed components comprise the base salary, fixed allowances and compulsory employer contribution to an employee’s Central Provident Fund. B Variable Component: The variable component is derived from the Performance Bonus Plan (PBP). It is linked to the evaluation of the achievement of each key management personnel’s annual performance targets as set in their Balanced Scorecard (BSC). Under the Balanced Scorecard framework, CLAS’ strategy and goals are translated to performance outcomes comprising both quantitative and qualitative targets in the dimensions of: › REIT Performance: This includes targets relating to profitability and distributions, capital structure, financial and risk management, as well as investor engagement; › Preparing for Future: This includes targets relating to asset enhancement initiatives and portfolio reconstitution, asset performance and renewal of master leases and management contracts; ANNUAL REPORT 2023 113
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