Picton Property Income Limited Annual Report 2022

Remuneration Report continued

Annual bonus for 2021/22 The annual bonus for the year ended 31 March 2022 for the Executive Directors was based on a combination of financial metrics (60%) and corporate objectives (40%). The targets set for the year ended 31 March 2022 and the assessment of actual performance achieved are set out in the table below. The financial metrics comprised two equally weighted components: total return relative to a comparator group of similar companies, set out later in this Report; and total property return compared to the MSCI UK Quarterly Property Index. At the date of this Report not all of the companies in the total return comparator group had announced their results to 31 March 2022 and the Committee has estimated, based on the results to date, that this condition will not be met, resulting in an award of 0%. The Committee will determine the actual outcome of this condition once all companies have reported, and any adjustment required between the estimate and actual will be made in next year’s Remuneration Report. There will be no payout of the bonus until a finalised result can be confirmed.

Awarded (% of maximum) 0% (estimate)

Awarded (% of salary) 0% (estimate)

Performance condition

Basis of calculation

Range

Actual

Total return versus comparator group Bonus weighting: 30% Total property return versus MSCI Index Bonus weighting: 30%

Less than median – 0% Equal to median – 50% Equal to upper quartile – 100% Less than median – 0% Equal to median – 50% Equal to upper quartile – 100%

Not yet available

28.3%

Median 20.9% Upper quartile 24.9%

24.3%

92.5% 45.8%

The corporate objectives for the Executive Directors for the year to 31 March 2022 were determined by the Remuneration Committee and accounted for 40% of the maximum award. The corporate objectives applying to both Executives, and the assessment of performance against these, are as follows:

Awarded (% of maximum)

Awarded (% of salary)

Performance condition

Assessment

Improve occupancy and income profile Bonus weighting: 8% Devise and publish net zero carbon pathway Bonus weighting: 6% Improve portfolio environmental factors Bonus weighting: 4% Embedded Picton flexileasing on smaller assets Bonus weighting: 2% Complete key refurbishment projects on budget and on time Bonus weighting: 6% Consider options to improve operating efficiencies Bonus weighting: 6% Positive stakeholder engagement Bonus weighting: 4% Identify and evaluate growth opportunities Bonus weighting: 4%

Occupancy has increased from 91% to 93% and rental income has increased by nearly 10% this year. EPRA earnings have risen by 5%. The net zero carbon pathway has been completed and was published in April 2022. The portfolio’s EPC weightings have improved this year, with 71% rated A to C on an ERV basis. There are 42 more green leases in place. Scope 1 and 2 GHG emissions have reduced by over 27% compared to the 2019 baseline. More biodiversity initiatives have been introduced. SwiftSpace was developed and launched in the year and five short form leases have been completed at four properties. Some projects have been subject to inflationary increases and additional works in certain cases. Key projects at Regency Wharf, Birmingham and at 180 West George Street, Glasgow have been completed on time and on budget. The Group’s weighted average interest rate has been reduced to 3.7% following the refinancing of the Canada Life facility. The EPRA cost ratios are both lower this year, although the Group cost ratio remained at 1.0%. The dividend has now been restored to its pre-pandemic level, and there has been positive share price growth. Employee satisfaction remains high at 82%. Opportunities have been considered and progressed during the year.

100% 13.2%

95% 9.4%

90% 5.9%

70% 2.3%

80% 7.9%

85% 8.4%

90% 5.9%

90% 5.9%

Picton Property Income Limited Annual Report 2022

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