Corporate Governance D. Employee Benefits: The benefits provided are comparable with local market practices. Remuneration of Key Management Personnel Each year, the NRC evaluates the extent to which each KMP has delivered on the business and individual goals and objectives, and based on the outcome of the evaluation, approves the compensation for the KMP. In such evaluation, the NRC considers whether the level of remuneration is appropriate to attract, retain and motivate the KMP to successfully manage CLCT for the long term. The CEO does not attend discussions relating to his own performance and remuneration. In determining the remuneration package for each KMP, the NRC takes into consideration appropriate compensation benchmarks within the industry, so as to ensure that the remuneration packages payable to KMP are competitive and in line with the objectives of the remuneration policies. While the disclosure of, among others, the names, amounts and breakdown of remuneration of at least the top five KMP (who are not Directors or the CEO) in bands no wider than S$250,000 and the aggregate of the total remuneration paid to these KMP would be in full compliance with Provision 8.1 of the Code, the Board has considered carefully and decided that such disclosure would not be in the interests of the Manager or Unitholders6 due to: (a) the intense competition for talents in the REIT management industry, the Manager is of the view that it is in the interests of Unitholders not to make such disclosures so as to minimise potential staff movement and undue disruption to its key management team; (b) the need to balance the confidential and commercial sensitivities associated with remuneration matters, the Manager is of the view that such disclosures could be prejudicial to the interests of Unitholders; (c) the importance of retaining competent and experienced staff to ensure CLCT’s stability and continuity of business operations, the Manager is of the view that such disclosures may subject the Manager to undue risks, including unnecessary key management turnover; and (d) there being no misalignment between the remuneration of the KMP and the interest of Unitholders. Their remuneration is not borne by the REIT as they are paid out from the fees that the Manager receives (the quantum and basis of which has been disclosed to Unitholders in this Annual Report). Apart from the KMP and other employees of the Manager, the Manager outsources various other services to a wholly owned subsidiary of CLI (CLI Subsidiary). The CLI Subsidiary provides these services through its employees and employees of CLI Group (together, the Outsourced Personnel). This arrangement is to provide flexibility and maximise efficiency in resource management to match the CLCT’s needs, and to leverage on economies of scale and tap on the management talent of an established corporate group which can offer enhanced depth and breadth of experience. Notwithstanding the outsourcing arrangement, the responsibility for due diligence, oversight and accountability continues to reside with the Board and Management. In this regard, the remuneration of such Outsourced Personnel, being employees of the CLI Subsidiary and CLI Group, is not included as part of the disclosure of remuneration of KMP of the Manager in this Report. In FY 2024, no termination, retirement or post-employment benefits were granted to Directors, the CEO and other KMP. There was also no special retirement plan, ‘golden parachute’ or special severance package for any KMP. There were no employees of the Manager who were substantial shareholders of the Manager, substantial Unitholders of CLCT or immediate family members of a Director, the CEO, any substantial shareholder of the Manager or any substantial Unitholder of CLCT. “Immediate family member” refers to the spouse, child, adopted child, step-child, sibling or parent of the individual. Remuneration for Non-Executive Directors The non-executive Directors’ fees are paid by the Manager and the FY 2024 fees, together with a breakdown of the components, are set out in the Non-Executive Directors’ Remuneration Table on page 75 of this Annual Report. The remuneration policy for non-executive Directors is based on a scale of fees divided into basic retainer fees for serving as Director and additional fees for serving on Board Committees. There were no attendance fees payable, save for in-person participation by Directors at Board and Board Committee meetings that require Directors to travel overseas. Directors’ fees are paid to non-executive Directors on a current year basis. The CEO, who is an executive director, is remunerated as part of the Manager’s KMP and does not receive any Director’s fees. The non-executive Directors who are employees of the CLI Group also do not receive any Directors’ fees. The non-executive Directors’ fee structure and Directors’ fees are reviewed and benchmarked against the REIT industry annually, taking into account the effort, time spent and responsibilities on the part of the non-executive Directors in light of the scale, complexity and geographic scope of the 6 The Manager is of the view that disclosure of the total remuneration of the KMP for FY 2024 together with the breakdown of their remuneration in the manner set out on page 75 provides a more holistic view and is consistent with the intent of Principle 8 of the Code, and that these and other details in this Corporate Governance Report provide sufficient information and transparency to Unitholders on CLCT’s remuneration policies for KMP, including the level and mix of remuneration and the procedure for setting remuneration. These disclosures would enable Unitholders to understand the relationship between CLCT’s performance, value creation and the remuneration of KMP. The Manager is of the view that the interests of Unitholders are not prejudiced by this deviation from Provision 8.1(b) of the Code, as the remuneration of KMP is aligned to safeguard these interests. 66 CapitaLand China Trust
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