In FY 2024, the NRC appointed an independent remuneration consultant, Willis Towers Watson (WTW), 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 Manager or any Directors, its 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 CLCT Group’s business strategy and deliver sustainable returns to Unitholders. The Manager is a subsidiary of CLI which also holds a significant stake in CLCT. This association facilitates the Manager in attracting and retaining better qualified management talent. It further provides an intangible benefit to the employees of the Manager 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 • Focuses on generating rental income and enhancing asset value over time so as to maximise returns from investments and ultimately the distributions and total returns to Unitholders • 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 CLCT Group • Puts significant and appropriate portion of pay-at-risk, taking into account risk policies of the CLCT 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 Unitholders, with an emphasis on linking pay to 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 (CPF). 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. 63 Annual Report 2024
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