Author: Compliance Issued: September 2016 Renewal: August 2017 Version 0.2 REMUNERATION POLICY

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1 REMUNERATION POLICY September 2016

2 This policy sets out the remuneration policy of Margetts Fund Management Ltd in relation to Code Staff and takes account of the rules and requirements set out in SYSC of the Financial Conduct Authority (FCA) source books. 1. Risk management and risk tolerance The Remuneration Policy is designed to allow the risks associated with remuneration to be better managed and to avoid undue risks associated with it. This Policy has been designed to support the strategy and long term interests of the company, its shareholders and customers. The Board has appointed a Remuneration Committee to review the general principles and implementation of the Remuneration Policy; The Board s policy is to reward performance based on profitable, sustainable and compliant behaviours; Following recommendations made by the Chief Executive, the Remuneration Committee has responsibility for decisions relating to remuneration for all Code Staff. This includes fixed and variable elements of remuneration and discretionary pension benefits; Individuals remuneration consists of a basic package which is payable in any event and represents a market rate for the duties undertaken. Additional payments are discretionary and will only be awarded on the basis that the individual has contributed to the long term sustainable well-being of the business as measured across a range of factors including profitability, training and competence, compliance with the FCA s requirements and other factors considered relevant; 2. Supporting business strategy, objectives, values and long-term interests of the firm including the funds managed and the investors in those funds The company s strategic objectives are to: Grow the business through organic growth and product range enhancements; Provide investment products which meet or exceed client expectations; Ensure we attract and retain key talent within the business; Develop the use of technology to increase business efficiency and security; Ensure the business embraces regulatory principles and rules; Maintain long term sustainable financial stability and profitability. The remuneration policy is designed to support and enhance each of these objectives. 3. Avoiding conflicts of interest The Remuneration Policy is agreed by a Remuneration Committee which consists of all the nonexecutive Directors and the Company Secretary. The Company Secretary does not vote on any recommendations.

3 The implementation of the Remuneration Policy is subject to a central and independent review for compliance to ensure any potential conflicts are identified and managed. The Policy and its implementation will comply with the company s Conflicts of Interest Policy. 4. Governance This Remuneration Policy is reviewed and adopted by the Remuneration Committee: Annually; On a significant change to the business activities of the company; On a significant change to a business relationship which forms a material part of the business of the company; or At such other point as the Board or Remuneration Committee considers necessary in order to comply with the Principles contained in this Policy. The members of the Remuneration Committee who can decide remuneration policies and awards do not perform any executive functions within the company and have an expertise in risk management and remuneration structures and strategies. The Remuneration Committee directly oversees the remuneration of the Compliance Officer and senior officers of the risk management functions. The Remuneration Committee is responsible for the preparation of decisions regarding remuneration including those with implications for the risk and risk management of Margetts and will be given reasonable access to remuneration records of Code Staff and other employees where relevant. To ensure knowledge levels remain current, the Remuneration Committee will undergo periodic training and this will be facilitated by Margetts. 5. Control functions and Code Staff The Board has regard to the size, nature and complexity of the business of the company when setting the Remuneration Policy. In a small firm there may be circumstances where the employees engaged in control functions perform more than one function. Employees carrying out control functions have been given the appropriate authority to carry out their roles and also retain an independence from the business units they oversee. The following persons are engaged in control functions or considered potential code staff: Toby Ricketts Tim Ricketts Matthew Jealous James Clay Alex Weston Geoffrey Oakley Andrew Quy Jane Vessey Rob McGrath Wayne Buttery

4 Ross Carter All proposed structures and levels for any variable remuneration are considered by Compliance before being set. In addition the Remuneration Committee will oversee the remuneration of senior officers in the risk management and compliance functions. Compliance and the Board, in accordance with the appraisal process described in the company s Training & Competence scheme, reviews the training and competence standards achieved by persons in control functions and the remuneration awarded to such persons. 6. Performance adjustment Any variable remuneration can be reclaimed in the event of gross misconduct or gross or wilful negligence. This can include adversely affecting the reputation of the company such as bringing the company into disrepute or a breach of contract of employment or engagement. Examples of this could be inappropriate behaviour, suppressing documents, inflating trading income and discrimination in the workplace. 7. Remuneration and capital The Board s approach to variable remuneration is such that all variable remuneration is discretionary in nature and will not jeopardise the company s current regulatory capital position, future identified capital planning needs nor its ability to respond to any identified risk that it will need to strengthen its capital base. The Remuneration Committee will take into account the long-term interests of investors, other stakeholders and the public interest. When assessing individual performance both financial and non-financial criteria are taken into account and this will include the performance of the individual, the business unit or fund concerned and also the overall results of the company. 8. Exceptional government intervention The company does not benefit from exceptional government intervention. Should this become relevant the Board will revise this Policy in accordance with the Remuneration Principles. 9. Profit-based measurement and risk adjustment The following sources of revenue are used to determine variable remuneration: Fees from assets under management; Fees from advisory services; Fees from ACD services; Fees from the provision of investment research. The following are used to measure performance of individuals: Growth in fees from assets under management;

5 Growth in fees from advisory services; Growth in fees from ACD services; Services levels and standards of service. When considering the Policy and the above, consideration is also give to the following risks, capital and liquidity factors: Consistency, timing and likelihood of revenues; Decline in value of funds under management or advice through market movements or performance; Decline in value of funds under management or advice through departure of clients; Decline in value of fees from ACD services as a result of structural change; Departure of staff and potential impact on future revenues; Pressure on fees and competitor pressure; The cost and quantity of capital and liquidity requirements; The impact of future increases in the cost of administering the business arising from both inflationary and decision (i.e. future expansion) factors. The above will vary in relevance depending on the Code Staff in question as sales consultants will have an emphasis on sales whereas others may have an emphasis on more areas and include assets under management. The Remuneration Committee uses both quantitative and qualitative judgements in deciding the levels of variable remuneration and uses its best judgement based on risk adjustment techniques. In addition the Remuneration Committee consults the risk management function and Compliance when considering awards of variable remuneration. 10. Pension policy The company s pension policy is standard and there are no individual discretionary awards and there this does not form part of performance related remuneration and no discretionary pension benefits are paid to retirees. A recipient of variable remuneration, in accordance with this policy, may choose to pay such monies into a pension, whether provided by or through the company or a third party. 11. Personal investment strategies The company requires code staff to sign a personal account dealing undertaking. Included within this undertaking is a confirmation that employees do not use personal hedging strategies or liability related contracts of insurance in relation to any part of their remuneration arrangements or the company s performance.

6 The company has a process for monitoring employee trading activities and will monitor such activities to ensure compliance with this policy. 12. Avoidance of the Remuneration Code Any variable remuneration paid to an individual is only paid in compliance with this Remuneration Policy. 13. Remuneration structures This policy is consistent with and promotes effective risk management. The appointment of new employees and the adoption of new remuneration structures for new or existing employees will be subject to the Board s approval and ensure that the terms of such appointments and such remuneration structures are in accordance with this Policy. The variable remuneration of code staff reflects their performance over and above that required by their terms of employment and is subject to adjustment. The total remuneration is based on an assessment of their performance, the business unit(s) and the overall performance of the company in the short and medium term. The Board has regard to the appraisal of the employee when setting total remuneration. The performance of individuals will be assessed in terms of their overall contribution to the well-being and future well-being of the company. This will include their performance against T&C outcomes, compliance with the approved person s principles (APER), compliance with company procedures, risk management requirements and principles. Variable remuneration will never exceed twice the fixed remuneration and will only exceed once the fixed remuneration if it has been agreed by the Board by resolution and approved by shareholders representing at least 50.1% of the issued share capital. The company will not guarantee any variable remuneration and will ensure any payments in relation to early termination reflect performance and not reward failure.