CORPORATE GOVERNANCE › Sustainability: This includes targets relating to talent retention, succession planning and sustainable corporate practices (including workplace safety); and › Managers’ Financial Health: This includes targets relating to the Managers’ financial viability and efficiency. These Balanced Scorecard targets are approved by the Boards and cascaded down throughout the organisation, thereby creating alignment across CLAS. After the close of each financial year, the Boards review CLAS’ achievements against the targets set in the Balanced Scorecard and determine the overall performance taking into consideration qualitative factors such as the quality of earnings, operating environment, regulatory landscape and industry trends. In determining the payout quantum for each key management personnel under the PBP, the NRC considers the overall business and individual performance as well as the affordability of the payout to the Managers. The PBP is delivered in a combination of cash and deferred Stapled Securities with employees in senior management grades receiving a greater proportion of their PBP payout in deferred Stapled Securities. These time-based Stapled Securities are awarded pursuant to the Managers’ Restricted Stapled Security Plan (RSSP) and will vest in three equal annual tranches without further performance conditions. Recipients will receive fully paid Stapled Securities, their equivalent cash value or combinations thereof, at no cost. These Stapled Securities awards ensure ongoing alignment between remuneration and sustainable business performance. C Long-term Components: Stapled Security awards were granted in FY 2023 pursuant to the Managers’ Performance Stapled Security Plan (PSSP). The Managers believe that the Stapled Security-based components of the remuneration for key management personnel serve to align the interests of such key management personnel with that of Stapled Securityholders and CLAS’ long-term growth and value. The obligation to deliver the Stapled Securities is satisfied out of existing Stapled Securities held by the Managers. To promote the alignment of Management’s interests with that of Stapled Securityholders in the longer term, senior members of Management are subject to Stapled Security ownership guidelines to instill stronger identification with the longer-term performance and growth of the Stapled Group. Under these guidelines, senior members of Management are required to retain a prescribed proportion of Stapled Securities received under the Stapled Security Plans worth up to at least one year of basic salary. Stapled Securities vested pursuant to the Stapled Security Plans may be clawed back in circumstances where the relevant participants are found to be involved in financial misstatement, misconduct, fraud or malfeasance to the detriment of the Stapled Group. Managers’ Performance Stapled Security Plan (PSSP) In FY 2023, the NRC granted awards which are conditional on targets set for a three-year performance period. A specified number of Stapled Securities will only be released to the recipients at the end of the qualifying performance period, provided that minimally the threshold target is achieved. Under the PSSP, an initial number of Stapled Securities (PSSP baseline award) is allocated conditional on the achievement of pre-determined targets for Stapled Securityholder returns and sustainability (included with effect from the FY 2023 award). In respect of Stapled Securityholder returns, Management is measured by the Relative Total Stapled Securityholder Return (TSSR) of the Stapled Group, based on the percentile ranking of the TSSR of the Stapled Group relative to the constituent REITs in the FTSE ST REIT Index. In respect of sustainability, Management is measured on outcomes such as green building certification. 114 CAPITALAND ASCOTT TRUST
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