in the scorecard to foster greater accountability and ownership across the company. Notably, ESG-related performance metrics account for up to 20.0% of the Manager’s overall performance evaluation, underscoring its commitment to integrating sustainability into our business practices. For more details on our sustainability goals and initiatives, please refer to the Sustainability Report 2025. At the end of each calendar year, the performance scores are calculated and awards are made accordingly. These factors were chosen because of their measure of both short- and long-term goals and to capture the qualitative versus quantitative targets of performance measurement. Using a balanced scorecard approach, the KPIs are determined annually based on alignment to the longer-term strategic priorities and annual operating plan. At the start of each financial year, KPIs are endorsed by the NRC and approved by the Board. The NRC is of the view that the level and structure of remuneration of the key management personnel were appropriate and aligned with the sustained performance and value creation of MUST, in consideration of MUST's strategic objectives for FY2025. Remuneration of Key Management Personnel The NRC and the Board review the performance measures and the outcome on an annual cycle. A significant and appropriate proportion of the key management personnel’s remuneration is structured so as to link rewards to corporate and individual performance. In reviewing the actual quantum of the variable component of remuneration paid to the key management personnel, the NRC had taken into account the extent to which the performance conditions, as set out above, have been met. The NRC is of the view that the performance-related remuneration of key management personnel were appropriate and aligned with the interests of Unitholders and other stakeholders, and the individual and overall corporate performance of MUST for FY2025 to promote the long-term success of MUST. The remuneration for all key management personnel are paid in the form of cash only. While the approach reflects a pay-for-performance culture, it is also designed to attract, motivate and retain highperforming and high-potential employees in their respective field of expertise, to enable and assist in the successful management and longevity of MUST in the long-term. Employees are also incentivised through annual variable bonus awards that are tied to a variety of financial and non-financial measures and key staffs are eligible for a Long-Term Incentive Scheme. The NRC has ensured that the Manager’s compensation programme conforms to the Financial Stability Board’s (FSB) principles for sound compensation practices as well as the FSB’s implementation standards. The FSB is an international body endorsed by the G20 nations that monitors and makes recommendations about the global financial system. The FSB’s set of principles were developed in 2009 to align compensation with prudent risk-taking. Long Term Incentive Scheme The Long-Term Incentive Scheme is designed to motivate the performance of management personnel and promote greater alignment of interests with Unitholders. Based on Manulife’s internal equity policy, the CEO and key management personnel of the Manager are granted Restricted Share Units (RSUs) under the Long-Term Incentive Scheme which has been linked to MUST Units from its listing in 2016 onwards. MUST RSUs are vested on a three-year cycle. The RSUs entitle the holder to receive payment in cash linked to the value of the MUST Units at the time of vesting. No employee share option schemes or share schemes have been implemented by MUST. The Long-Term Incentive Scheme has been put in place to increase the Manager’s flexibility and effectiveness in its continuing efforts to reward, retain and motivate employees to achieve superior performance and to motivate them to continue to strive for long-term Unitholder value. Mr Marc Lawrence Feliciano’s holdings in MFC shares are non-material. Furthermore, there is unlikely to be any potential misalignment of interests given that Mr Marc Lawrence Feliciano acts as a Non-Independent Non-Executive Director and does not hold executive positions in the Manager. As Non-Independent Director, he would in any event have to abstain from approving and recommending any Interested Person Transactions and Interested Party Transactions (Related Party Transactions) with an entity within the Manulife Group, mitigating any potential misalignment of interests with those of Unitholders. Remuneration of Directors The Directors’ fees consist of a base retainer fee as a Director and an additional fee for serving on Board Committees. This serves to compensate the Directors according to the level of responsibility, time and effort required for their role. The remuneration is commensurate to their level of contribution, taking into account factors such as effort, time spent, and responsibilities, and is appropriate to attract, retain and motivate Directors to provide good stewardship of MUST and key management personnel to successfully manage MUST for the long term. The Directors’ remuneration package is benchmarked to the market to ensure competitiveness and is reviewed annually. There were no changes in the Directors’ Fees framework for FY2025. All fees are paid in cash directly by the Manager, not by Unitholders. CORPORATE GOVERNANCE / 78 / EXPANDING HORIZONS
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