102 Remuneration for Key Management Personnel (including CEO) The NRC seeks to ensure that the level and mix of remuneration for the Manager remains competitive, aligned with Unitholders’ interests and promotes ESR-REIT’s long-term success. A significant and appropriate proportion of the KMP’s remuneration is structured so as to link rewards to corporate and individual performance, and performance-related remuneration is aligned with the interests of shareholders and other stakeholders and promotes the long-term success of ESR-REIT. The NRC also ensures that the remuneration of the CEO shall not only be linked to the gross revenue of ESR-REIT or the Manager. The Total Compensation Framework was developed to reflect the following key considerations: a) Alignment to Performance • clear and measurable performance indicators • incentives-linked to performance to drive the right behaviour b) Market Practice and Benchmarking • reflects the current market evolution • benchmark against market compensation level c) Reflects Business Realities • reflects ESR-REIT’s strategic priorities and business plan • in line with regulatory changes The Total Compensation Framework aims to reward the KMP to work towards achieving the strategic goals of ESR-REIT as approved by the Board. It promotes a culture of meritocracy and aligns the KMP with the long-term objectives of ESR-REIT by providing clear targets for the KMP to motivate performance and efficiency. This allows the Manager to retain outstanding performers and attract good candidates to execute ESR-REIT’s strategic priorities and business plans. The remuneration components within the Total Compensation Framework include fixed pay, fixed allowances, short-term incentive (“STI”) bonus and long-term incentive (“LTI”) plan. The STI is driven by the Manager Corporate Scorecard where it covers a mixture of financial and non-financial key performance indicators (“KPIs”) aligned to both the interests of ESRREIT and the Manager. The KPIs include financial metrics such as DPU, debt costs, operating costs, and non-financial metrics such as talent management, occupancy rate and risk management and control processes. Linking STI bonus to the Manager Corporate Scorecard helps to achieve strategic goals of ESRREIT which are aligned to the interests of the Unitholders. Given the growth profile and footprint of ESR-REIT, strategic transactions will likely be a key feature of ESR-REIT’s business plan. Strategic transactions such as mergers and acquisitions or any other transformational deals can be long-gestated, time and resource consuming, and require special attention, care and often sacrifices beyond working hours. At the same time, employees who are involved in the strategic transactions are still required to handle the daily business-as-usual activities. Within the STI component, an Additional Bonus Pool (“ABP”) is included to reward such employees. Once the employee is awarded with ABP, onethird of the award may be vested annually, provided he/she remains in employment with the Manager. The purpose of the LTI is to reward KMP for achieving the Manager’s strategic objectives that maximise Unitholders’ value. The LTI is awarded through the vesting of Units held by the Manager and the payout is conditional upon the achievement of pre-determined performance targets measured over a 3-year period. The award of the LTI will be based on achieving target level for performance for the following KPIs: total unitholder return, price/book multiple and sustainability targets, and such award will lapse if performance is not met at the end of the performance period. For FY2025, the Manager carried out a formal annual performance review process to reinforce strengths as well as identify improvements and development plans for the KMP. Based on the performance review, the NRC and the Board are of the opinion that most of the performance conditions used to determine the remuneration of the KMP were met. The NRC and the Board are of the view that the remuneration is aligned to FY2025 performance and that the Total Compensation Framework is aligned with the long-term interests and risk management policies of ESRREIT and the Manager. The NRC and the Board are also of the view that the level and structure of remuneration of the Board and the KMP are appropriate and proportionate to the sustained performance and value creation of ESRREIT, taking into account the strategic objectives of ESR-REIT. ESR-REIT ANNUAL REPORT 2025 Corporate Governance
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