Corporate Governance While Provision 6.1 of the Code provides for the NRC to make recommendations to the Boards on the specific remuneration package for each KMP, the Boards are of the view that such matters are best decided by the NRC as part of its focused scope, and have delegated the decision-making on such matters to the NRC. The NRC reports any decisions made on such matters to the Boards. This is accordingly consistent with the intent of Principle 6 of the Code. In FY 2024, the NRC appointed an independent remuneration consultant, Willis Towers Watson, to provide professional advice on Board and executive remuneration. The appointed independent remuneration consultant advises the NRC on the compensation of the KMPs including, but not limited to, the reasonableness of compensation levels in relation to the performance achieved, the competitiveness of compensation levels against relevant industry peers, compensation trends and practices around the world. The consultant is not related to the Managers, the Directors, their controlling shareholder or its directors or CLI’s related corporations. Remuneration Policy and Framework The remuneration policy and framework, which take reference from the compensation framework of CLI, are designed to support the implementation of the Stapled Group’s strategy and deliver sustainable returns to Stapled Securityholders. The Managers are subsidiaries of CLI which also hold a significant stake in CLAS. This association facilitates the Managers in attracting and retaining better qualified management talent. It further provides an intangible benefit to the employees of the Managers by offering the depth and breadth of experience associated with an established corporate group and enhanced career development opportunities. The Remuneration Policy has four key principles: Business Alignment Fair & Appropriate • Focus on generating recurring income and enhancing asset value over time so as to maximise returns from investments and ultimately the distributions and total returns to Stapled Securityholders • Provides sound and structured funding to ensure affordability and cost-effectiveness in line with performance goals • Enhances retention of key talents to build strong organisational capabilities • Strengthens alignment to ESG practices • Ensures competitive remuneration relative to the appropriate external talent markets • Manages internal equity such that remuneration is viewed as fair across the Stapled Group • Puts significant and appropriate portion of pay-at-risk, taking into account risk policies of the Stapled Group, symmetric with risk outcomes and sensitive to risk time horizon Motivate Right Behaviour Effective Implementation • Pay for performance - align, differentiate and balance rewards according to multiple dimensions of performance • Strengthens line-of-sight linking rewards and performance • Maintains rigorous corporate governance standards • Exercises appropriate flexibility to meet strategic business needs and practical implementation considerations • Facilitates employee understanding to maximise the value of the remuneration programmes Under the Remuneration Framework, a significant proportion of the KMP’s, including the CEO’s, total remuneration is in the form of variable compensation, awarded in a combination of short-term, deferred and long-term incentives, to ensure alignment of the CEO’s and KMP’s interests with those of the Stapled Securityholders with an emphasis on linking pay to business and individual performance. Performance targets are hence set at realistic yet stretched levels each year to motivate a high degree of business performance with emphasis on both shorter-term and longer-term quantifiable objectives. There are four key components of the remuneration for the CEO and KMP: A Salary: Includes the base salary, fixed allowances and compulsory employer contribution to an employee’s Central Provident Fund. The base salary is remunerated based on an employee’s competencies, experience, responsibilities and performance. It is typically reviewed on an annual basis to ensure market competitiveness. 76 CapitaLand Ascott Trust
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