Remuneration policy
In line with the requirements of European Remuneration Directives, Exoduswhales (the “Company”) has a remuneration policy in place, which includes the relevant principles governing how the Company remunerates its members of staff and recognised “Identified Staff”.
As outlined in the remuneration policy, the remuneration arrangements of the Company have been designed in a manner that (i) is consistent with and promote sound and effective risk management, (ii) does not encourage risk-taking that is inconsistent with the risk profile of the fund/ (s) (the “Fund”), and (iii) does not impair compliance with the Company’s duty to act in the best interests of the unitholders of the Fund.
Approach
Our approach to remuneration has always been designed to support the long term business interests of the company shareholders (which in turn are based on delivering value to our customers over the long term), to reflect the asset management risk model and to deliver long term sustainability. This model is consistently applied locally to each subsidiary entity in our international network. Our remuneration policy is:
Performance and Variable pay
At an individual level employee are assessed at least once a year. The performance assessment of all employees includes both qualitative and quantitative elements where appropriate. The variable pay structure for rewarding high performers is fully discretionary and is determined by individual performance and overall company affordability.
Portfolio managers compensation is aligned to the interests of the strategies they manage and that of the clients. A large part of Portfolio Manager remuneration is aligned to the performance of their strategies. Individual performance is measured over a longer-term duration (typically over 3 to 5 years) which incorporates an evaluation of measures of sustainability, balanced view on the investment process followed, long term investment performance delivered for our clients and several other financial and non-financial measures.
We consider sustainability risks including (amongst other things) compliance with applicable policies, fund governance requirements and procedures, including our disclosures in relation to sustainability risks
Risk management
The risks taken by the company are almost exclusively operational and agency risks and are taken within the publicly available risk parameters. Within this context, there is a qualitative element to all bonuses which can be adjusted as appropriate to reflect behaviours and performance in relation to risk and compliance behaviours. Those who recommend/approve awards for employees are apprised of any risk and compliance issues, breaches or failure that may be relevant for those decisions and can make such adjustments as deemed appropriate to reflect those issues.
Governance
Remuneration policy at FIL is set at a Group level, in keeping with Group policy and practices. Subsidiary company Boards have no formal responsibility for setting local remuneration policy (except where explicitly required by local legal or regulatory requirements) or for reviewing the compensation of locally employed staff. The Remuneration Policy Statement (The “RPS”) is prepared by the Exoduswhales Group compensation team in conjunction with compliance, and approved by, the FIL Remuneration Committee and then noted by the FIL Board. There are clearly defined approvals and governance processes, with oversight by a professional compensation and benefits function. All major risk events are reported to the Remuneration Committee and Chairman and line managers are notified of risks and ethics events impacting their staff. Separately, the Compensation and Benefits team, work with Risk professionals within Exoduswhales on an ongoing basis to identify any more systemic risks with the compensation approach and to develop means of addressing these. Finally, no employees are involved in the determination or approval of their own remuneration.
Identified staff
In line with its interpretation of the provisions of the Remuneration Directives and subject to any future change in accordance with applicable laws, regulations and/or guidance, Exoduswhales identifies individuals whose professional activities have a material impact on the risk profiles of the Company and the funds that it manages
(“Identified Staff”), including:
other risk takers such as: all staff members whose professional activities – either individually or collectively, as members of a group – can have a material influence on the risk profiles of the Company or of a funds it manages.
The Remuneration committee approves the list of Identified Staff annually and individuals are notified of their identification and the implications of this status on at least an annual basis.
Delegation
Where the ManCo delegates investment management activities, the ManCo shall require confirmation from the delegate entity either that (i) it is subject to equally as effective regulation on remuneration (which shall include the remuneration rules of the Capital Requirements Directive or the Markets in Financial Instruments Directive as such rules apply to the delegate); or (ii) it sets its remuneration in compliance with the Exoduswhales Remuneration Policy (provided that such confirmation shall only be required in respect of staff of the delegate (if any) who have a material impact on the risk profile of the relevant Fund, and only in respect of such proportion of the remuneration of any such individuals as is attributable to the performance of the delegated function). The Exoduswhales Remuneration Policy is compliant with the requirements of the Financial Conduct Authority’s Remuneration Code as it applies to the delegate entities within the Exoduswhales group, and is more stringent in a number of respects (including in respect of deferrals and payment in instruments, as referred to above). Exoduswhales views its global remuneration policy as being equally effective and which ensures that the remuneration requirements of the Directive are not circumvented.
Annual review
On an annual basis the Remuneration committee will review the terms of this Remuneration Policy and assess whether its overall remuneration system operates as intended and is compliant with the obligations on remuneration as set out within the relevant and applicable directive.
For any further details regarding our remuneration policy, please write to Raj Kumar at raj.kukumar@fil.com