Letter from the Chairman of the Remuneration Committee

Dear shareholder,

As a Board we are focused on creating shareholder value over the longer term and ensuring that the Company’s remuneration policy is aligned with shareholders’ interests. Our remuneration report explains how we seek to achieve this, in a transparent way.

Last year, I outlined changes to the vesting conditions for grants under our Long-Term Incentive Plan (LTIP). Our motivation for making the changes was to ensure that the criteria for vesting were challenging, measurable against objective benchmarks and aligned with shareholder interests. As a result, vesting will occur only where the Group’s performance is at least equal to the Total Shareholder Return of a comparator group of large property companies or the Investment Property Databank benchmarks. No vesting will occur purely as a result of general increases in the value of property or shares in listed companies and full vesting will only occur following a material outperformance of both benchmarks. This underlines our view that exceptional rewards are only paid for exceptional performance.

Performance against LTIP grants is measured over a three year period. In addition to providing information on the partial vesting of grants made in 2008, our report includes an interim update on the Group’s performance against awards made in 2009 and 2010.

The Committee oversaw a complete review by the Group of the remuneration for all employees. During the course of the review, management consulted with employees and introduced changes that more closely aligned their remuneration with the business targets of the Group. The Committee was very pleased with the outcome of the review, which was implemented during the course of the year.

More details on the work of the Committee follows in our report.

David Rough

  • David Rough
  • Chairman, Remuneration Committee