CapitaLand Investment Limited - Annual Report 2021

135 CapitaLand Investment Limited 134 Annual Report 2021 SHARE PLANS – PERFORMANCE SHARE PLANS AND RESTRICTED SHARE PLANS (continued) Share Plans of the CapitaLand Group Pte. Ltd. (continued) (b) The CL RSP awards will be converted to cash-settled based awards with an implied value of S$4.102 per CL share. Contingent awards granted under the CL RSP have been finalised at 150% of the baseline awards based on the same implied value. The cash payment will be released to eligible employees according to the original vesting schedule of respective CL RSP award. Share Plans of the Company (CLI) The ERCC of the Company was formed on 3 July 2021 and it has been designated as the Committee responsible for the administration of the Share Plans. The ERCC members at the date of this statement are Mr Stephen Lee Ching Yen (Chairman), Mr Miguel Ko, Ms Goh Swee Chen and Ms Judy Hsu Chung Wei. The CLI Performance Share Plan 2021 (CLI PSP 2021) and CLI Restricted Share Plan 2021 (CLI RSP 2021) were approved by CapitaLand Group Pte. Ltd. the immediate holding company of CLI on 17 July 2021. The duration of each share plan is 10 years commencing on 1 September 2021. The ERCC of the Company has instituted a set of share ownership guidelines for members of senior management who receive shares under the CLI Restricted Share Plans and CLI Performance Share Plans. Under these guidelines, members of senior management are required to retain a portion of the total number of CLI shares received under the aforementioned share-based plans, which will vary according to their respective job grade and salary. The total number of new shares which may be allotted, issued and/or delivered pursuant to awards granted under the Share Plans on any date, when aggregated with existing shares (including treasury shares and cash equivalents) delivered and/or to be delivered, pursuant to the CLI Share Plans and all shares, options or awards granted under any other share schemes of the Company then in force, shall not exceed 8% of the total number of issued shares (excluding treasury shares) from time to time. Details of awards granted under each CLI Share Plan are provided in the following sections: (a) Awards under the CLI Performance Share Plans (CLI PSP) Under the Performance Share Plans, the awards granted are conditional on performance targets set based on medium-term corporate objectives. Awards represent the right of a participant to receive fully paid shares, their equivalent cash value or combinations thereof, free of charge, upon the Company achieving prescribed performance target(s). The ERCC grants an initial number of shares (baseline award) which are conditional on targets set for a performance period, currently prescribed to be a three-year performance period. A specified number of shares will only be released by the ERCC to the recipients at the end of the qualifying performance period, provided the threshold targets are achieved. The final number of shares to be released will depend on the achievement of pre-determined targets over a three-year performance period. No share will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more shares than the baseline award can be delivered up to a maximum of 200% of the baseline award. The ERCC has the discretion to adjust the number of shares released taking into consideration other relevant quantitative and qualitative factors. Recipients can receive fully paid shares, their equivalent cash value or combinations thereof, at no cost. All outstanding contingent CL PSP awards granted to the employees have been finalised at 200% of the baseline awards and employees will receive in lieu of the Company’s shares, awards under the CLI Share Plan in accordance with a conversion ratio and released progressively in accordance with the original vesting schedule. SHARE PLANS – PERFORMANCE SHARE PLANS AND RESTRICTED SHARE PLANS (continued) (b) Special CLI Founders Performance Share Plan Award (Special PSP) Pursuant to the CLI PSP, the Special PSP award granted to selected key executives of the Company and/ or its group companies is conditional on a performance target based on longer term wealth creation objectives. Participants will receive a specified number of performance shares after the end of the performance period conditional on achievement of performance conditions. The ERCC grants an initial number of shares (baseline award) which are conditional on the target of the Company’s share price expressed as a multiple of the Group’s net asset value per share (Price/NAV) set for a five-year performance period. A specified number of shares will only be released by the ERCC to the recipients at the end of the qualifying performance period, provided the pre-specified minimum target is achieved. No share will be released if the minimum target is not met at the end of the performance period. On the other hand, if the superior target is met, more shares than the baseline award can be delivered up to a maximum of 300% of the baseline award. In the event of early achievement of the targets within the first three years of the performance period, a maximum of 20% to 50% of the baseline award can be released after the third year, with any balance in excess of 50% of the baseline award to be released only after the fifth year. The ERCC has the discretion to adjust the number of shares released taking into consideration other relevant quantitative and qualitative factors. Recipients can receive fully paid shares, their equivalent cash value or combinations thereof, at no cost. A one-time special contingent award was granted to selected key executives in the Company and CL group companies as at 1 October 2021. As a hiring strategy, such one-time special contingent award may (at the absolute discretion of the ERCC) also be extended to key executives joining the Company and/or its group companies on a date after 1 October 2021 but not later than 19 September 2022. Details of the movement in the CLI PSP and Special PSP awards of the Company during the year were as follows: Granted Balance as at 31 December 2021 Year of award No. of shares No. of holders No. of shares CLI PSP 2021 25,776,933 @ 186 25,776,933 * Special PSP 2021 14,594,336 112 14,594,336 ^ 40,371,269 298 40,371,269 @ Following the delisting of CapitaLand Group Pte. Ltd., 8,869,880 shares under CL PSP awards were converted to 25,776,933 CLI Shares under CLI PSP in October 2021. * The number of shares comprised in awards granted under the CapitaLand Investment Performance Share Plan 2021 comprised 19,275,824 shares (31 December 2020: nil) granted to the employees of the Group and 6,501,109 shares (31 December 2020: nil) granted to the employees of the related corporations. ^ The number of shares comprised in contingent awards granted under the Special PSP award comprised 12,327,258 shares (31 December 2020: nil) granted to the employees of the Group and 2,267,078 shares (31 December 2020: nil) granted to the employees of the related corporations. (c) Awards under the CLI Restricted Share Plans (CLI RSP) Under the Restricted Share Plans, awards granted to eligible participants vest only after the satisfactory completion of time-based service conditions or where the award is performance-related, after a further period of service beyond the performance target completion date (performance-based restricted awards). In addition, the plans also enable grants of fully paid shares to be made to non-executive directors as part of their remuneration in respect of their office as such in lieu of cash. Directors’ Statement Directors’ Statement