Governance Remuneration Report continued
Salary review for 2021/22 In considering the salary review for 2021/22, the Committee took into account a number of factors. They received an independent benchmarking report covering each of the roles within the Picton team and considered publicly available data and other market intelligence. The Committee’s deliberations regarding the base salaries for the Executive Directors are set out above. For the remainder of the team as a whole the Committee determined that there would be an overall average rise of 6.4% in base salaries with effect from 1 April 2021. Non-Executive Director fees The fees for the Chair and Non- Executive Directors were last reviewed in 2018, at the start of the current Remuneration Policy. In conjunction with the new Policy, a further review of the fees was carried out, incorporating an independent market data report of similar companies, and an assessment of the annual time commitment for each role, including the Committee Chairs. In light of this review, the following annual fee rates apply from 1 April 2021. ӱ The Chair fee is increased to £116,800 from £105,000 ӱ The Non-Executive Director fee is increased to £45,000 from £40,000 ӱ The additional fee for the Chair of the Audit and Risk, Remuneration and Property Valuation Committees is £7,500 (increased from £5,000 for the latter two roles) The new rates position the fees at the market lower quartile, which is considered appropriate.
ӱ EPRA earnings for the year were slightly ahead of the previous year, with an increase in occupancy and lower costs offsetting the additional provisions made against income. ӱ The loan to value ratio has fallen, and no drawdowns have been made under the revolving credit facility. The Committee concluded that it was satisfied the formulaic bonus outcome was a fair reflection of overall Group performance during the past financial year. Long-term Incentive Plan awards (performance period to 31 March 2021) The awards made under the Long-term Incentive Plan (‘LTIP’) in June 2018 were based on three performance conditions measured over the three-year period ended on 31 March 2021. The LTIP provides the link between the long-term success of the Company and the remuneration of the whole team. The Committee has assessed the extent to which these three performance performance conditions were total shareholder return, total property return and growth in EPRA earnings per share. The actual outcomes for these conditions are set out in the Annual Remuneration Report and give rise to an overall award of 67% of the maximum granted. As explained above, the Committee concluded that it was satisfied the formulaic outcome was a fair reflection of overall Group performance over the performance period. conditions have been met. The three equally weighted
The corporate objectives were set in the context of the Covid-19 pandemic. These objectives were intended to ensure that the business was able to withstand the adverse impacts of the pandemic and be well positioned for a recovery. The Committee considered that the Executive Directors had largely met the corporate objectives, evidenced by the robust results for the year. More detail is provided later in this Remuneration Report, but overall the Committee considered that outcomes of 84% of the maximum award for the two Executive Directors were merited against the corporate objectives. In aggregate, annual bonus awards for the two Executive Directors are 80% of the maximum award (2019/20 – 70% and 73% of maximum). The Committee considered the formulaic bonus outcome in the context of the Group’s overall performance for the year. Performance has been discussed earlier in the Report but particular points considered by the Committee included: ӱ The return from the property portfolio was upper quartile compared to the MSCI UK Quarterly Property Index for the year, and our long-term record of outperformance has been maintained over three, five and ten years. ӱ The Group’s profit for the year was £34 million, giving a total return of 6.6%. The profit was some 50% higher than the previous year and achieved in a very challenging market.
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