THE UNITE GROUP PLC Annual Report and Accounts 2024 114 REMUNERATION COMMITTEE continued GOVERNANCE This change reflects the Committee’s view that bonus deferral is a means of aligning the interests of shareholders and Executives over the medium term, by facilitating the building up of a shareholding over time. However, where an Executive has acquired (through self-purchases) or earned (through share-based incentives) a significant total holding of shares – as defined by the in-post shareholding guidelines – the Committee considers it appropriate to relax the mandatory deferral requirement and allow any bonus subsequently earned to be paid entirely in cash. This represents a more competitive, and fairer approach, without diluting our clear emphasis on the importance of the alignment of Executive and shareholder interests through meaningful share ownership. The existing requirement to defer up to 50% of any amount earned for two years remains in place as an Executive Director is building towards their in-post shareholding guideline, and we have maintained rigorous and enforceable malus and clawback provisions for all variable pay. The majority of responses received on this change were supportive. One shareholder responded that the change did not align with its voting policy, while another asked the Committee to consider reducing, rather than removing, the mandatory deferral requirement (but with an exception made for the current CEO noting his already significant shareholding). The Committee re-evaluated its original proposal based on the comments received, before concluding to submit this for approval without further revision noting: (a) the balance of shareholder feedback received was supportive, and (b) other aspects of the Policy and its implementation continue to underpin strong alignment of Executive interests with those of shareholders. However, recognising that circumstances can change, and acknowledging that this is an evolving area of market practice, the Committee will keep under review the deferral mechanism at the next Policy review, to ensure it continues to remain appropriate for Unite Group. As part of the consultation, one shareholder requested further information on how the proposed changes would position the CEO relative to sector peers, which is summarised below as further context for all shareholders. This analysis illustrates that, while Unite Group is currently ranked third out of 17 companies in the sector in market cap terms, the CEO’s salary is tenth highest and total remuneration is 12th highest. The cash elements of the CEO’s remuneration (i.e. salary, pension and cash bonus) currently make up 52% of the total fair value of his package, ranking tenth of sector comparators (and 12th in monetary terms). With the CEO significantly exceeding his shareholding guidelines, the proposed changes to the bonus deferral mechanism would mean that the cash elements of remuneration would rise to 65% of his total pay from 2025. OVERALL PAY OUTCOMES FOR 2024 Taken as a whole, the Committee is satisfied that overall pay outcomes in respect of the year ended 31 December 2024 are appropriate and accordingly we have not applied any discretion to this year’s incentive outcomes. REVIEW OF THE DIRECTORS’ REMUNERATION POLICY The 2025 AGM marks the third anniversary of the adoption of the Directors’ Remuneration Policy and in line with UK reporting regulations, a new Policy is being submitted to shareholders for approval. In reviewing the Policy, the Committee took into account Unite Group’s historical performance and strategy, and market practice across the UK real estate sector and broader FTSE market since the Policy was approved. The Committee also considered the views of Unite Group’s broad range of stakeholders. Overall, the Committee is satisfied that the existing remuneration structure – consisting of salaries, pension contributions and performance-linked short- and long- term incentives – remains appropriate. We proposed two main changes to the Policy and wrote to shareholders representing c.67% of the issued share capital, as well as to key proxy advisers, for comments and feedback at the end of 2024. In total, we received replies from shareholders representing c.45% of the issued share capital, with this feedback having been fully considered by the Committee in agreeing the final proposals, as follows: (1) Increase the annual bonus opportunity from 140% to 150% of salary. This change seeks to ensure that the Policy remains aligned to market practice for a company of Unite Group’s size operating in the UK real estate sector, and provides the Committee with additional flexibility to incentivise the senior leadership team to deliver exceptional performance over the next three years. Unite Group’s annual bonus opportunity has been changed only twice over the last 20 years: an increase from 100% to 144% of salary in 2008, and a subsequent reduction from 144% to 140% of salary in 2019 (as part of a simplification of the scheme). A maximum opportunity of 150% of salary would be aligned with 12 out of 16 other FTSE 350 Real Estate sector peers and would continue to be weighted at least 70% on financial performance. Shareholder feedback on this change was generally very supportive and accordingly no changes were made to the original proposal. (2) Disapply the bonus deferral requirement in cases where an Executive Director meets or exceeds their in-post shareholding guideline.