Impact of Performance Results

The summary results of Vestcor’s investment program, as measured by pre-selected long-term investment performance metrics, are as follows:

• The total fund active nominal return for investment mandates where we have full management discretion for the year ended December 31, 2021 was 9.46% and represents approximately $1.9 billion in gross earnings from the overall investment program. The annualized active nominal return for the past four years ending December 31, 2021 was 7.50%, which represents approximately $5.7 billion of cumulative gross investment earnings. • Value added investment returns (in excess of benchmarks) for 2021 were very strong. Total fund relative returns were higher than the combined weighted average client Investment Policy benchmarks for the year ended December 31, 2021, adding 210.4 basis points of value after deducting all investment management costs. A basis point is equal to 1/100ths of a percent. This value added contributed net investment income of approximately $425.7 million in 2021. Over the longer more important four-year period to December 31, 2021, the investment program has provided a positive net return of 86.7 basis points of value annually over client benchmarks or over $651.9 million of net investment returns.

The following table shows total compensation awards and payments, excluding Directors’ remuneration (see page 51), for the year ended December 31, 2021.

Salaries and benefits, excluding performance incentives

ICP performance incentives Net investment relative performance Corporate scorecard and individual performance Total ICP LTIP1

Total performance incentives Deferred portion of ICP Total performance incentives paid

1 LTIP being discontinued from 2021 to 2023 as discussed above

2021

($ thousands)

13,796.2

3,993.7 1,887.8 5,881.4 2,688.1 8,569.6 2,638.6 5,931.0

2020 ($ thousands)

13,391.1

774.2 1,700.5 2,474.7 1,951.8 4,426.5 –4,426.5

For the year ended December 31, 2021, and after consideration of the continuing competitive talent retention environment, the Board approved a modest cost of living salary increase and merit pool. The Board also approved three new full-time positions in 2021 that enabled Vestcor to build operational capacity in line with our continued growth.

The net increase in performance incentives reflects, for eligible investment staff, the impact of the strong 2021 investment performance on the calculation of the four-year active management value added after costs results discussed in the section above, three additional positions added in the year, the changes to base salaries, the transition from the LTIP design and the business plan accomplishments for the year (see pages 47 – 49).