Safestore : Notice of General Meeting

NOTICE OF GENERAL MEETING 2023

Part I: Letter from the Chair of the Remuneration Committee of the Board of Directors of Safestore Holdings plc

Registered office: Brittanic House Stirling Way Borehamwood Hertfordshire WD6 2BT

To all shareholders 19 June 2023 Dear shareholder,

Notice of General Meeting

I am pleased to be writing to you to provide details of a general meeting of the Company (the "General Meeting" or "GM"), which we are holding at 3.00 pm on Wednesday 12 July 2023 at the offices of the Company, Brittanic House, Stirling Way, Borehamwood, Hertfordshire WD6 2BT. The GM relates to the proposed new Directors' Remuneration Policy (the "Policy") and a consequent amendment to the Safestore 2020 Long Term Incentive Plan ("2020 LTIP"). The proposals are those referenced on page 89 of the 2022 Annual Report, the details of which were not available at the time of drafting the Directors' Remuneration Report. The formal Notice of the GM is set out in Part II of this document.

By way of context, Safestore has established a strong track record in significantly growing revenue, earnings, and dividends per share and, consequently, share price over the past decade resulting in the Company entering the top quartile of the FTSE 250 by market capitalisation. Safestore owes much of its success to a highly motivated management team which has successfully executed the Board's strategy, managing an increasingly complex and internationally diverse business. The Executive Directors have continued to deliver exceptional performance and exceed expectations, allowing Safestore to add stakeholder value by developing profitable and sustainable spaces that allow individuals, businesses, and local communities to thrive. Some of their achievements include:

• substantial revenue growth (increasing from £96.1 million in 2013 to £212.5 million in 2022);
• adjusted EPRA EPS growth of 380% (increasing from 9.9 pence in 2013 to 47.5 pence in 2022), enabling a progressive dividend policy;
• total shareholder returns of c.790% (from 1 September 2013 to 31 May 2023), significantly in excess of the FTSE 250, FTSE 350 Supersector Real Estate sector indices and key peers, as illustrated in the chart below; and
• external recognition of our commitment to colleagues by the award of the prestigious Investors in People Platinum accreditation.

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Whilst the Committee is acutely aware of the current economic landscape, it believes it is business critical to appropriately incentivise and retain an excellent management team to continue to deliver value for our shareholders. Indeed, this principle was discussed by the Chairman and the Senior Independent Director at meetings held last year with a number of our larger institutional shareholders, all of whom agreed that the motivation and retention of the Executive Directors and the Senior Management team was considered by shareholders to be a critically important challenge for the Board going forward.

We recognise that the Executive Directors received significant payouts from the 2017 LTIP on the basis of their exceptional performance. However, on a total remuneration basis the current approach of the CEO being paid a base salary below the FTSE 250 and the FTSE 350 real estate sector lower quartiles (and the CFO a similarly conservative salary) does not provide an appropriately motivating forward looking package as set out in the analysis below. This is particularly pertinent as the 2017 LTIP has now vested and no longer provides a significant retention mechanism for either Executive Director or the broader executive team, and base pay levels have always been significantly below the market and kept deliberately low in previous years, in anticipation of the 2017 LTIP pay-out. The Committee feels they should be increased to more competitive levels aligned with market, given management's sustained performance and increased complexity of the group's business, which is now present in six European countries. The current situation is not in the interest of shareholders, and it represents a risk which now needs to be addressed.

CEO and CFO pay benchmarks vs FTSE 350 real estate companies (data collated from latest annual reports)

• Note Safestore's salaries include the 1 May 2023 increase set out below

The Committee also notes that over the period from his internal promotion to CEO on 3 September 2013 the CEO's salary has increased by around 5% p.a, while the complexity of Safestore's business and market capitalisation has increased by over £1.8 billion with TSR growth of c.790% over the same period. The current salary positioning has been driven by a starting salary set below the CEO's predecessor and a desire from the Committee at the time to adopt a highly leveraged remuneration framework through the operation of the 2017 LTIP.

Therefore, given that the management team is highly regarded by the investor community, its exceptional track record of performance

over a decade, significant expansion and increased complexity and expanded geographical footprint, and that Safestore has moved into the upper quartile of companies in the FTSE 250 by market capitalisation, the Committee determined that it would be appropriate to reposition the Executive Directors' pay to a more competitive positioning relative to FTSE 250 companies while addressing the issue of the conservative salary positioning over time. The three guiding principles the Committee has adhered to are:

• FTSE 250 median total remuneration on grant for strong performance;
• FTSE 250 upper quartile total remuneration on grant for outstanding performance; and
• maintain a culture where a significant portion of total remuneration is based on performance and creation of long-term shareholder value. The Committee initially explored two alternative approaches to achieve this desired repositioning of pay:

1. significant increases to salary in combination with market standard variable pay opportunity levels; and
2. maintain conservative salary levels (10% increase in 2023 would place the Executive Directors broadly at lower quartile) with a market standard bonus and a significant LTIP opportunity.

The Committee was of the view that the second approach would be more suitable for Safestore given the pay for performance culture, while keeping a hard discipline on fixed costs at a time of heightened economic uncertainty. The Committee presented an initial proposal for the 2023 Remuneration Policy reflecting the second approach above to our major shareholders in January 2023. The key in changes in Policy were in relation to the LTIP as follows:

• Increase annual LTIP awards to 300% of salary for the CEO and 215% of salary for the CFO, from 200% of salary for both ("Base awards"), payable for strong performance.
• Introduce strategic/operational and ESG based measures alongside EPS growth in the LTIP Base award for 2023.

NOTICE OF GENERAL MEETING 2023

Part I: Letter from the Chair of the Remuneration Committee of the Board of Directors of Safestore Holdings plc continued

Notice of General Meeting continued

• Base award vesting level can be increased if TSR performance is above the upper quartile of the FTSE 250 (excluding Investment Trusts) through a multiplier award, up to a maximum of 1.75 times for upper decile performance (the "Multiplier"). Therefore, the overall maximum LTIP award would have been 525% of salary for the CEO and 376% of salary for the CFO, allowing them to aspire to upper quartile remuneration for outstanding performance.
• This was underpinned by a performance modifier whereby the number of LTIP awards vesting would be reduced by one-third, if Safestore's TSR over the performance period was either below the median TSR of the FTSE 350 Supersector Real Estate index or negative.
• The proposal also included a 10% salary increase for both the CEO and CFO to be implemented in 2023.

The Committee subsequently undertook two rounds of extensive shareholder engagement on the proposed remuneration structure to understand shareholder sentiment towards the proposals. We were pleased that all of our shareholders were supportive of our efforts to retain an exceptional management team and that a significant number supported the initial proposals.

We set out below the key areas of the proposals that required refinements based on the shareholder feedback received during this process, and how the Committee has responded to them (in italics):

• Scale back the proposed FY2023 base salary increase for the Executive Directors below the average increase in the workforce. There was a clear message from investors that, notwithstanding the medium term goal of bringing the CEO/CFO salaries to their median market benchmark, additional restraint should be shown in relation to increases for Executive Directors compared to the workforce this year, due to the cost of living crisis having a greater impact on the lower paid.
  For FY2023, Executive Directors' salary increases will be 6%, below the average UK workforce increase of 7.36%.
• Reduce the proposed LTIP award levels to below 500% of salary.
  2023 LTIP awards have been reduced by adjusting the maximum multiplier from 1.75 times to 1.6 times This brings the CEO's maximum award below 500%, at 480% of salary, whilst his total remuneration opportunity, at grant, is now exactly aligned with the FTSE 250 upper quartile.
  As a result of the lower multiplier, the CFO's maximum award will also be reduced, to 344% of salary.
• Commit to move to a competitive structure over time that is more closely aligned with standard market practice understanding that this would require a rebalancing of fixed and variable pay at Safestore. Specifically, future salary increases required to bring salaries to market levels should be matched with corresponding reductions in LTIP award levels in order to achieve a more normalised structure over time. In particular, the Committee should signpost that larger salary increases will be required over the Policy timeframe, with a corresponding reduction in LTIP award levels, to achieve the desired rebalancing of pay.
  Commit to evolving the remuneration package to a more market-aligned conventional structure, over the life of the Policy such that, in principle, a new Policy put to shareholders in 2026 would reflect a "normalised structure". This would be achieved on a phased basis with salary increases applied annually to rebase fixed pay to a more market competitive position and total LTIP award levels correspondingly reduced to allow the split between base salary and LTIP to converge with market practice. The driving principle which will guide the Committee will be to ensure that there is not a multiplying effect, i.e. total maximum remuneration on grant will continue to broadly align with, but not exceed, the upper quartile of the FTSE 250 for exceptional performance over the life of the Policy. In addition, total remuneration on grant for strong performance will continue to broadly align with the median of the FTSE 250.
  The Committee has determined that a phased approach in which salary increases are applied in each year of the Policy, which for the avoidance of doubt may be higher than the average workforce rate, together with annual reductions in the LTIP opportunity, is the most appropriate way to achieve the desired structure and ensures alignment with shareholder expectations. The Committee also notes that if circumstances permit, it will accelerate this process over a shorter timeframe if possible.
  The same guiding principles (i.e. FTSE 250 median total remuneration on grant for strong performance and FTSE 250 upper quartile total remuneration on grant for exceptional performance) would apply should there be recruitment of a new Executive Director and, in particular, the Committee expects to accelerate the phased approach such that the package on recruitment would reflect a normalised structure, while also taking account of the experience and track record of the candidate.

Summary of Policy proposals

Taking account of the refinements set out above, we summarise below the Policy the Committee is proposing.

Salary: Salary increases will be applied annually over the life of the Policy, which for the avoidance of doubt may be higher than the average workforce rate (noting that the FY2023 increase will be 6%, below the average UK workforce increase of 7.36%).

Pension: In line with corporate governance best practice, the Committee aligned the Executive Directors' pension contribution rate with the average workforce rate from 1 May 2021. Therefore, no change is required other than to update the Policy such that it is clear that both incumbents and new hires pension contribution rates are aligned to the average workforce rate.

Benefits: No material changes to Policy.

Annual bonus: No material changes to Policy other than to increase flexibility in Policy wording in relation to performance measures. The annual bonus will continue to operate with a maximum opportunity of 150% of salary, with 20% and 50% of maximum paid for threshold and on-target performance respectively. Any bonus earned below 100% of salary will be paid in cash with bonus above 100% of salary held in shares for two years on a net of tax basis, and dividends paid on these shares.

Two-thirds of the bonus opportunity will be subject to financial measures and one-third subject to non-financial measures e.g., strategic or operational based measures. There will be no pay out under the non-financial measures if threshold financial performance is not met.

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Summary of Policy proposals continued

LTIP: The LTIP will continue to award nil cost options over shares on an annual basis with a three year vesting and a two year holding period. Dividend equivalents will be paid on vested shares and paid in additional shares.

The maximum annual Base award will be up to 300% of salary for the CEO and 215% of salary for the CFO. The performance measures, weightings and targets for the Base award will be set each year by the Committee based on a combination of financial and non-financial measures e.g., strategic or ESG based measures. Full vesting of the Base award will only be achieved for what the Committee considers to be strong performance.

In line with the Committee increasing the stringency of the performance conditions (see section below), the vesting schedule for the Base award will be changed such that for the financial measures 20% (rather than 25%) of awards will vest for threshold performance. For the non-financial measures in the Base award 0% of awards will vest for threshold performance i.e., vesting will only occur for above threshold performance. The section below sets out how the Committee has calibrated additional stretch into the performance targets for 2023, commensurate with the increase in proposed award levels.

Vesting of the Base awards can be increased by up to 1.6 times such that the overall maximum award will be 480% and 344% of salary for CEO and CFO respectively with the maximum Multiplier award only paying out for outstanding performance.

The Committee's intention is that total LTIP award levels will be reduced during the Policy period, by decreasing the maximum annual Base award of 300% and 215% for the CEO and CFO respectively, while the maximum Multiplier will remain set at 1.6 times for the three-year period covered by the new Policy. This is to ensure that relative TSR performance, as a KPI, remains in place as a performance measure, in line with the feedback received from several shareholders.

Shareholding guidelines: In-employment guidelines will be significantly increased to 600% and 450% of salary for the CEO and CFO respectively, aligning with typical investor guidance that they should be broadly equal to the annual incentive opportunity, noting that LTIP award levels will fall during the Policy period. Post-employment guidelines are proposed to remain at 350% of salary for two years for both Executive Directors, which continues to be significantly ahead of market practice. The Committee is aware that this does not fully align with the IA's Principles of Remuneration, which provides for the post-employment shareholding requirement applying for at least two years at a level equal to the lower of the shareholding requirement immediately prior to departure or the actual shareholding on departure. However, it is comfortable with this approach given that both the in-employment and post-employment shareholding requirements are significantly greater than typical market practice, and that both Executive Directors have significantly high levels of shareholding.

2023 LTIP performance metrics

The performance metrics for 2023 continue to include as its main KPI EPS growth (in line with previous policies and a key performance

criteria for shareholders), but now also two further KPIs: (i) a strategic KPI, defined as aggregate net increase in Maximum Lettable Area ("MLA") (as a key metric in Safestore's long term growth agenda) and ESG KPIs. We are acutely aware that to justify an increase in pay there needs to be a corresponding increase in the stretch of the attaching performance measures and targets, and this is what is proposed for 2023 as set out below. Therefore, the LTIP performance targets have been calibrated such that, to earn median FTSE 250 levels of remuneration, strong corporate performance is required. In addition, maximum vesting is only achievable for exceptional performance (i.e. the maximum opportunity for the Executive Directors at grant is equivalent to FTSE 250 upper quartile levels of remuneration, if they deliver upper decile levels of performance). In line with these principles, the Committee has determined to implement the LTIP Policy as set out below for the 2023 awards. The Committee notes that for subsequent years, future targets will reflect the current business plan and economic environment at the time targets are set.

Base award

For 2023, the performance metrics under the Base award have been selected such that maximum vesting will only be achieved for significant growth in the Company's key profitability metric (EPS), strong strategic/operational progress on our growth priorities and strong progress against our ESG strategy. The ESG targets, if they are met, will ensure the Group is on track to meet its commitment to achieve net zero emissions from operations by 2035 whilst also supporting the valuation of its asset portfolio.

• 65% subject to EPS growth target, where, for 2023, 20% vests for 5% p.a. growth, 65% vests for 7% p.a. growth, 80% vests for 9% p.a. growth and 100% vests for 12% p.a. growth. The EPS targets have been calibrated such that they demonstrate significantly more stretch than the current policy, with threshold performance set to align with consensus estimates. Since discussing these targets with shareholders, the Committee have introduced an additional vesting point - 65% vesting level at 7% p.a. EPS growth, which is in excess of analysts' forecasts.
• 25% subject to strategic/operational measures. For 2023, the measure will be the aggregate net increase in MLA with 0% vesting for threshold performance, 50% vesting for target and 100% vesting for maximum performance. Given the Board considers the targets set to be commercially sensitive, they will be disclosed retrospectively, but the Committee is able to confirm that the threshold level of performance has been set above Safestore's 31 October 2022 MLA pipeline and above main competitor's recent levels of MLA net increase.
• 10% subject to ESG, with 2023 targets based on EPC ratings of developments or refurbishments and reduction in greenhouse gas emission intensity. The vesting schedule is the same as the strategic/operational measures element.

Please see the section headed "Performance measures and targets" on pages 13 to 15 for details on why these measures were selected for 2023 and how targets were calibrated.