B Performance Bonus: Using the Balanced Scorecard (BSC) framework, the Stapled Group’s strategies and goals are translated to performance outcomes comprising both quantitative and qualitative targets in the dimensions of REIT Performance, Preparing for Future, Sustainability and Managers’ Financial Health. These BSC targets are approved by the Boards and cascaded down throughout the organisation, thereby creating alignment across the Stapled Group. The performance measures and their relative weights in each dimension are reviewed annually to reflect the Stapled Group’s business priorities and focus for the relevant year. Key Objectives REIT Performance Preparing for Future This includes targets relating to profitability and distributions, capital structure, financial and risk management, as well as investor engagement. This includes targets relating to asset enhancement initiatives and portfolio reconstitution, asset performance and renewal of master leases and management contracts. Key Objectives Sustainability Managers’ Financial Health This includes targets relating to talent retention, succession planning and sustainable corporate practices (including workplace safety). This includes targets relating to the Managers’ financial viability and efficiency. After the close of each financial year, the Boards review the Stapled Group’s achievements against the BSC targets 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 KMP, the NRC considers the overall business and individual performance, as well as the affordability of the payout to the Managers. The Performance Bonus is paid out in the form of a cash bonus and deferred Stapled Securities awards with senior management grade employees receiving a greater proportion of their payout in deferred Stapled Securities. Deferred Stapled Securities awards are awarded pursuant to the Managers’ Restricted Stapled Security Plan (RSSP) and vests in three equal annual tranches without further performance conditions. Recipients will receive fully paid Stapled Securities, their equivalent cash value or combinations thereof. These Stapled Securities awards ensure ongoing alignment between remuneration and sustainable business performance. C Long-term Incentives: The Managers have established the Performance Stapled Security Plan (PSSP) and RSSP (together, the Stapled Security Plans) to promote the alignment of Management’s interests with that of the 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. The NRC has approved Stapled Security ownership guidelines for senior management to instill stronger identification with the long-term performance and growth of the Stapled Group. Under these guidelines, senior 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 or reclaimed 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) Pursuant to the PSSP, Stapled Securities are awarded to senior management which are conditional on the achievement of targets relating to the following key measurements of wealth creation for Stapled Securityholders and commitment of the Stapled Group towards sustainability: (a) Returns: Relative Total Stapled Securityholder Return (TSSR) of CLAS which is based on the percentile ranking of the TSSR of CLAS relative to the constituent REITs in the FTSE ST REIT Index; (b) Portfolio Growth: Net Asset Value per Stapled Security; and (c) Sustainability: Performance outcomes such as green building certification 77 Annual Report 2024
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