Corporate Governance Code 2018 We have considered the provisions of the 2018 Code in respect of remuneration and believe that our approach is compliant. In particular, we operate a consistent level of pension provision across our workforce; LTIP awards are only released five years after award; and malus and clawback provisions apply to all incentive awards. We have provisions in the rules of our remuneration share plans that prevent, other than in exceptional circumstances, accelerated vesting of awards when an employee leaves Picton. This year we introduced a post- employment shareholding guideline in the new Remuneration Policy. The remuneration arrangements provide alignment with shareholders through the use of financial metrics and corporate objectives. All members of the team participate in the annual bonus and LTIP, not just the Executive Directors. The Remuneration Policy and its components are clearly set out in this Report and the rules of the variable remuneration schemes are available to the whole team. We use standard performance metrics, which are also Key Performance Indicators for the business, to determine awards. There are clear target and maximum levels for each condition. The Committee believes that the variable remuneration schemes in place are fair and proportionate and align the remuneration of the teamwith the Group’s performance. We are also satisfied that the remuneration structure does not encourage inappropriate risk-taking. The Committee does retain discretion over formulaic outcomes if it considers that these are not a fair reflection of the Group’s performance.
Implementation of Policy Our remuneration structure will be in accordance with the new Policy for the year to 31 March 2022. The bonus deferral policy for Executive Directors will continue, with 50% of any annual bonus award being deferred into Picton shares for a period of two years before vesting. The maximum annual bonus potential for 2021/22 will fall to 165% of base salary for the Executive Directors as outlined above. As in previous years the annual bonus will be determined 60% by financial metrics and 40% by corporate objectives. For 2021/22 we intend to use two financial metrics, being total return, relative to a comparator group, and total property return, relative to the MSCI UK Quarterly Property Index. The Committee considered that EPRA earnings per share (previously used as a third annual bonus metric) was more appropriate as a longer-termmeasure. This year we have reverted to our normal level of awards under the Long-term Incentive Plan. For the awards to be made in June 2021 for the three-year period to 31 March 2024 we will retain the three performance measures used previously, being: ӱ Total shareholder return, compared to a comparator group ӱ Total property return, compared to the MSCI UK Quarterly Property Index ӱ Growth in EPRA earnings per share For the growth in EPRA earnings per share, we intend to use an absolute range of targets based on forecasts over the performance period.
As a Committee, we are committed to ongoing dialogue with our shareholders. We look forward
to receiving your continued support at the forthcoming Annual General Meeting.
Maria Bentley Chair of the Remuneration Committee 26 May 2021
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