34
CapitaLand Mall Trust
Annual Report 2015
Corporate Governance
The Manager therefore did not have a remuneration committee. In its decision to adhere to the remuneration
policies and practices of CL, the Manager also took into account the belief that a framework of remuneration for
the Board and key executives should not be taken in isolation; it should be linked to the building of management
bench strength and the development of key executives. This would ensure continual development of talent and
renewal of strong and sound leadership for a sustainable business and an enduring company in the best interests
of CMT. The other additional factors considered were:
(a) by tapping on the compensation framework of CL, the Manager is placed in a better position to attract better
qualified management talent, who may otherwise not be attracted to a standalone REIT manager; and
(b) the Manager being a subsidiary of CL provides an intangible benefit of allowing its employees to associate
themselves with an established corporate group which can offer them depth and breadth of experience and
a career horizon and this enables the Manager to attract and retain qualified individuals.
As part of its commitment towards improving its corporate governance, the Board recently undertook a review of
the matter and has determined that it shall undertake the functions of a remuneration committee. The following
considerations were taken into account:
(a) the Manager is a dedicated manager to only CMT and in general, REITs (including CMT) have a more focused
scope and scale of business compared to those of listed companies. For this reason, the Board’s capacity
would not be unduly stretched by reason of it undertaking the responsibilities of a remuneration committee
and the Board would be able to give adequate attention to such issues relating to remuneration matters; and
(b) the IDs form at least half of the Board and the Chairman is an ID demonstrate that the IDs play a substantive
role and assures the objectivity and independence of the decision-making process concerning remuneration.
This also mitigates any concerns of conflict which can be managed by having the conflicted directors abstain
from the decision-making process. Further, conflict situations are less likely to arise in matters of remuneration.
Therefore, with effect from FY 2016, the Board will undertake the functions of a remuneration committee and the
Manager will continue not to have a separate remuneration committee. The Board will perform the functions that
such a committee would otherwise perform, namely, overseeing the design and implementation of the remuneration
policy and the specific remuneration packages for each Director and senior executives including the CEO.
No member of the Board will be involved in any decision of the Board relating to his own remuneration.
In terms of the process to be put in place by the Manager for developing policies on remuneration and determining
the remuneration packages for Directors and executive officers, the Manager will, through an independent
remuneration consultant, take into account benchmarking within the industry, as appropriate. It may also
consider the compensation framework of CL as a point of reference. The Manager is a subsidiary of CL which
also holds a significant stake in CMT. The association with the CL Group puts the Manager in a better position
to attract and retain better qualified management talent; it provides an intangible benefit to the Manager such
that it allows its employees to associate themselves with an established corporate group which can offer them
depth and breadth of experience and a career horizon. Following the issuance of new MAS directions and
guidelines relating to the remuneration of its key executives, the Manager has begun the process of reviewing its
remuneration policy with a view to adopting a policy which is in line with the new MAS directions and guidelines.
The principles governing the Manager’s key management personnel remuneration policy are as follows:
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