Annual Report 2025 85 CapitaLand Ascendas REIT Management Limited Performance Unit Plan Pursuant to the PUP, Units are awarded to senior management which are conditional on the achievement of targets relating to the following key measurements of wealth creation for Unitholders and commitment of the CLAR Group towards sustainability: (a) Returns: Relative Total Unitholder Return (TUR) of CLAR which is based on the percentile ranking of the TUR of CLAR relative to the constituent REITs in the FTSE ST REIT Index; (b) Portfolio Growth: Net Asset Value per Unit; and (c) Sustainability: Performance outcomes such as green building certification. The final number of PUP Units to be released will depend on the achievement of pre-determined targets over a three-year qualifying performance period. This serves to align Management's interests with those of Unitholders in the longer term and to deter short-term risk taking. No Unit will be released if the threshold targets are not met at the end of the qualifying performance period. If baseline targets are met or exceeded, more Units than the baseline award can be delivered, up to a maximum of 200% of the baseline award. The NRC has the discretion to adjust the number of Units released taking into consideration other relevant quantitative and qualitative factors. Recipients will receive fully paid Units, their equivalent cash value or combinations thereof. For FY 2025, the relevant award for assessment is the performance achieved by the CLAR Group for the award granted in FY 2023 where the qualifying performance period was FY 2023 to FY 2025. Based on the NRC’s assessment that the performance achieved by the CLAR Group has exceeded the pre-determined performance targets for such performance period, the resulting number of Units for the finalised award has been adjusted accordingly to reflect the performance level. In respect of the Units awards granted pursuant to the PUP in FY 2024 and FY 2025, the qualifying performance period has not ended as of the date of this Annual Report. In FY 2021, a one-time Special CLI Founders Performance Share Plan (Special PSP Award) was granted by the CLI Group to selected senior executives within the group (including the Manager) to commemorate its listing, foster a "founders' mindset" in driving transformation, and retain talent. The grant has a five-year performance period with defined performance parameters which are linked to CLI. Subject to the performance achieved, the award may vest at the end of the third and/or fifth year. Such compensation is in the long-term interests of CLAR as CLAR is a key part of CLI's business and ecosystem (and CLI is the single largest Unitholder of CLAR), and Management's actions to grow CLAR and drive CLAR's performance will also have a positive impact on CLI, thus reinforcing the complementary nature of the linked performance between CLAR and CLI. The cost of this one-time award will be borne by the Manager, and it is not expected to form a significant part of the KMP's remuneration over a five-year period. In addition, a proportion of the Management's remuneration is paid in the form of Units, which further incentivises the Management to take actions which are beneficial to the Unitholders. Accordingly, the Special PSP Award will not result in Management prioritising the interest of CLI over that of CLAR given that the bulk of their remuneration is determined based on the evaluation of the performance of CLAR, and a proportion of their remuneration comprises Units. In addition, it should be further noted that under the SFA, the Manager and Directors of the Manager are required to act in the best interest of CLAR and give priority to the interest of CLAR over the interests of the shareholders of the Manager, and this would further mitigate any potential conflicts of interest. Save for the Special PSP Award, the NRC will continue to assess and reward the KMP based on the performance of CLAR. Accordingly, the Manager is of the view that there would not be any conflicts of interest arising from the arrangement, nor would the arrangement result in any misalignment of interest with those of Unitholders. In respect of the Special PSP Award granted in FY 2021, there was no vesting in FY 2025. The next and final vesting, subject to performance conditions being met, will take place at the end of the qualifying performance period in FY 2026. There was no new Special PSP Award in FY 2025. CapitaLand Ascendas REIT Management Limited Restricted Unit Plan Pursuant to the RUP, Units awarded may be conditional on pre-determined targets set for a oneyear performance period. Prior to FY 2023, these targets were based on: (i) NPI of the CLAR Group; and (ii) DPU of the CLAR Group. These selected performance measures are key drivers of business performance and are aligned to Unitholder value.
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