Dear shareholder,

As a Board we strongly believe that the Company’s remuneration policy should be aligned with, and sensitive to, shareholders’ interests. The Remuneration Committee seeks to deliver that alignment by focusing management team incentives on successful delivery of strategy and appropriate returns for investors.

Over the past two years, Land Securities has been operating in very different market conditions to those prevailing prior to 2008. The Remuneration Committee has been mindful to reflect the changed circumstances affecting the Company and its shareholders. As a result, no salary increases or bonuses were awarded to the Executive Directors in respect of the financial year 2008/09 with the exception of Ian Ellis, the Chief Executive of Trillium, who received a bonus upon the sale of Trillium in January 2009. In 2010, the Committee decided to increase the salaries of the Executive Directors by an average of 2% and resume the payment of bonuses, which are based principally on the delivery of outperformance against objective benchmarks such as the Investment Property Databank (IPD).

Over the past 12 months we have changed the vesting conditions for grants under our Long-term Incentive Plan from June 2009 onwards. The introduction of a relative Total Shareholder Return measure, alongside the existing measure which benchmarks performance against the IPD quarterly index, is designed to align executive incentives more closely with shareholders’ interests and returns. We have an Additional Bonus Opportunity, which seeks to incentivise and reward significant outperformance of the IPD benchmark. This year we introduced an additional control mechanism to address the position where a year of outperformance is followed by a year of material underperformance.

We are committed to operating with transparency. In line with this commitment, the following section provides a concise question and answer section highlighting key principles, policies and actions from the year under review. The Policies section provides a full Directors’ remuneration report.

David Rough's signature

  • David Rough
  • Chairman, Remuneration Committee