The Board, in consultation with the NRC, was satisfied with the Board, ARC and NRC’s performance evaluation results for FY2024, which indicated that each and every Director had demonstrated commitment and contributed to the effective functioning of the Board, ARC and NRC. (B) REMUNERATION MATTERS PROCEDURES FOR DEVELOPING REMUNERATION POLICIES Principle 6 The Board has a formal and transparent procedure for developing policies on director and executive remuneration, and for fixing the remuneration packages of individual directors and key management personnel. No director is involved in deciding his or her own remuneration. LEVEL AND MIX OF REMUNERATION Principle 7 The level and structure of remuneration of the Board and key management personnel are appropriate and proportionate to the sustained performance and value creation of the company, considering the strategic objectives of the company. DISCLOSURE ON REMUNERATION Principle 8 The company is transparent on its remuneration policies, level and mix of remuneration, the procedure for setting remuneration, and the relationships between remuneration, performance and value creation. The role of the NRC is to make recommendations to the Board on all appointment and remuneration matters. The NRC also reviews and makes recommendations on succession plans for the Board and the executive officers. The NRC’s responsibilities in relation to remuneration matters also include, amongst others: • reviewing and recommending to the Board a general framework of remuneration for the Board and the executive officers; • reviewing and recommending to the Board the specific remuneration packages for each Director as well as for the executive officers; • reviewing MUST’s obligations arising in the event of termination of executive officers’ contracts of service and ensuring that such contracts of service contain fair and reasonable termination clauses which are not overly generous; and • reviewing the disclosures in the Annual Report on the Manager’s remuneration policies, level and mix of remuneration, and the procedure for setting remuneration. Remuneration Policy in respect of Key Management Personnel The NRC reviews the remuneration policy and the overall remuneration packages for executive officers annually, taking into account feedback from MFC’s executive compensation governance and human resource teams. The NRC, Board and MFC teams come together to ensure that the Manager’s remuneration policy is aligned with the wider Manulife Group’s compensation policy and is benchmarked to the market and that the remuneration payable is in line with the objectives of the remuneration policies. In determining the remuneration packages for key management personnel, the Manager takes into account compensation benchmarks within the industry as appropriate, including tapping on the Sponsor's compensation tools from their human resources which conducted annual benchmarking as well as market and industry survey. Accordingly, with the robust information from the Sponsor, the Manager did not engage any external remuneration consultants for FY2024. That said, the Directors and the NRC has the authority to direct the Manager to engage external consultants as they deem necessary without management's approval. CORPORATE GOVERNANCE 124 | MANULIFE US REIT
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