REMUNERATION POLICY EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE)

Transcription

1 REMUNERATION POLICY EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE) 1. General prvisins Definitins Objectives f the Remuneratin Plicy Cnslidate EdRAM s strategy, bjectives, values and lng-term interests Risk management and tlerance f risk-taking Gvernance Rle f the Executive Bdy Rle f the Supervisry Bard Rle f the France Grup s Remuneratin Cmmittee Rle f the cntrl functins Principles gverning the cmpsitin and payment f remuneratin Principles f apprtinment between the fixed and variable cmpnents f remuneratin Variable element f remuneratin Perfrmance Appraisals Terms n which the variable cmpnent f remuneratin is paid t Identified Emplyees Circumventing the Remuneratin Plicy Cmmunicatins t investrs Delegatin f management decisins EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE) 47, rue du Fauburg Saint-Hnré Paris Cedex 08 France T F S.A. à Directire et Cnseil de Surveillance au capital de eurs Numér d agrément AMF GP R.C.S. Paris

2 1. GENERAL PROVISIONS This Remuneratin Plicy has been apprved by Edmnd de Rthschild Asset Management (France) (EdRAM) s Supervisry Bard and applies t all EdRAM emplyees frm 1 January In the event f a cnflict between the French-language and English-language versins, the French versin will take precedence. The Remuneratin Plicy cmplies with: - the remuneratin plicy f the Edmnd de Rthschild France Grup (including its subsidiaries and branches) (the Edmnd de Rthschild France Grup r the France Grup ); - the remuneratin plicy f Edmnd de Rthschild Hlding, the parent cmpany f the Edmnd de Rthschild Wrld Grup, whse registered ffice is in Switzerland. Against this backgrund, the Remuneratin Plicy has been develped ver time based n the fllwing principal dcuments and rules: - Directive 2011/61/EU f 8 June 2011 n alternative investment fund managers, transpsed int the French Mnetary and Financial Cde by rder (the AIFMD ); - Directive 2014/91/EU f 23 July 2014 n the crdinatin f laws, regulatins and administrative prvisins relating t undertakings fr cllective investment in transferable securities ( UCITS ) as regards depsitary functins, remuneratin plicies and sanctins, transpsed by Order (the UCITS V Directive ); - the 2016/411 ESMA Guidelines f 31 March 2016 entitled Guidelines n sund remuneratin plicies under the UCITS Directive and AIFMD ; - and the laws, including the AMF psitins and instructins, that implement the directives int French law. This Remuneratin Plicy sets ut the principles applicable t all EdRAM France entities (branches) and, in line with EdRAM s strategy, bjectives and risk plicy, seeks t prmte sund and effective risk management while discuraging excessive risk-taking that runs cunter t the risk prfiles, the rules and the cnstitutinal dcuments f the funds managed by EdRAM, and seeks t align the lng-term interests f its sharehlders, clients/investrs and emplyees. The remuneratin structure fr EdRAM emplyees can be brken dwn int a fixed basic salary and a variable cmpnent. EdRAM fllws a perfrmance-based apprach t remuneratin that places value n the achievements, experience and key skills f the emplyees wh are the greatest cntributrs t value creatin within EdRAM. The bjective f this apprach is t attract and retain the mst able and mst talented emplyees, t encurage cmmitment and t strengthen EdRAM s leading psitin, while guaranteeing the best results and perfrmances fr EdRAM s clients ver the lng term. EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE) 2/10

3 This Remuneratin Plicy applies t: all frms f payment r benefits paid by EdRAM; all amunts paid by a fund itself (save fr reimbursements f csts and disbursements), including, fr funds, all perfrmance fees paid directly r indirectly t the categries f emplyee referred t herein; any transfer f fund units in exchange fr prfessinal services prvided by EdRAM s Identified Emplyees; any amunt paid by EdRAM in cnnectin with third party prtfli management activity. 2. DEFINITIONS Identified Emplyees : means the fllwing persns when their prfessinal activity has an impact n the risk prfiles f AIFs, UCITS r management mandates: - members f the Executive Bard; - persns exercising a cntrl functin; - emplyees respnsible fr prtfli management, administratin, marketing and human resurces; - risk takers and, in particular, fund managers and sales representatives; - thse persns whse verall remuneratin places them in the same remuneratin bracket as persns exercising a management functin, and risk takers insfar as they have an influence n the risk levels f assets under management r f EdRAM. The lists f Identified Emplyees and senir managers in charge f the risk management and cmpliance functins are drawn up and updated by the Human Resurces Department and apprved by the France Grup s Remuneratin Cmmittee after cnsulting the risk and cmpliance functins. Executive Bdy : means EdRAM s Executive Bard. France Grup s Remuneratin Cmmittee : means the cmmittee established at the level f the France Grup made up f members wh d nt hld executive ffices within EdRAM r the France Grup, the majrity f whm are independent. Its Chair des nt have an executive rle and is independent. It cmprises an apprpriate number f members with sufficient expertise and experience in management and risk cntrl activities. If emplyees are represented n EdRAM s decisin-making bdies, the France Grup s Remuneratin Cmmittee shall als include ne r mre representatives frm EdRAM's emplyees whenever that Cmmittee meets t discuss any matters relating t EdRAM. EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE) 3/10

4 3. OBJECTIVES OF THE REMUNERATION POLICY 3.1. CONSOLIDATE EDRAM S STRATEGY, OBJECTIVES, VALUES AND LONG-TERM INTERESTS EdRAM s bjective is t achieve strng investment perfrmances fr its clients ver the lng term. The France Grup s Remuneratin Cmmittee seeks t ensure that the philsphy, practices and remuneratin structures reflect its strategy. The chsen remuneratin philsphy aims t: - measure perfrmance by reference t the attainment f bjectives defined at the beginning f the year; - there are several levels f bjectives: business line, team and individual; - these bjectives are qualitative and quantitative; - retain the mst cmpetent and mst talented emplyees by ffering cmpetitive levels f remuneratin and allwing the best perfrming emplyees t stand ut; - fster cmmitment frm emplyees by rewarding businesses, teams and individuals in a fair and cnsistent manner; - Cnslidate EdRAM s leading psitin by rewarding perfrmances by reference t bth results and behaviur. Current remuneratin structures are designed t reward bth: - the creatin f shrt-term value fr clients and EdRAM thrugh a variable remuneratin cmpnent based n annual perfrmance; - the creatin f medium- and lng-term value fr clients and EdRAM thrugh variable mediumand lng-term remuneratin cmpnents RISK MANAGEMENT AND TOLERANCE OF RISK-TAKING EdRAM's bjective is t intrduce a structure that prvides reasnable and apprpriate remuneratin while ensuring that emplyees are nt encuraged t take inapprpriate and/r excessive risks. The size and allcatin f all variable cmpnents f an emplyee s remuneratin may be adjusted n a discretinary basis, in particular t reflect: - certain risk situatins and the cmpliance principles determined and mnitred by the risk management and cmpliance teams; - risks and cmpliance issues at all relevant management levels. EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE) 4/10

5 4. GOVERNANCE 4.1. ROLE OF THE EXECUTIVE BODY Every year, the Executive Bdy shall determine the individual remuneratin f the emplyees t whm the Remuneratin Plicy applies and submit prpsed remuneratin packages t the France Grup s Remuneratin Cmmittee fr thse persns t whm the France Grup s Remuneratin Plicy applies, ther than prpsals in respect f their wn persnal remuneratin ROLE OF THE SUPERVISORY BOARD EdRAM s Supervisry Bard shall adhere t the general principles set ut in the Remuneratin Plicy and shall be respnsible fr implementing and mnitring the plicy. It shall reassess the plicy at least nce a year. The members with respnsibility fr the plicy shall hld n executive ffice at EdRAM and shall have expertise in risk management and remuneratin systems ROLE OF THE FRANCE GROUP S REMUNERATION COMMITTEE The France Grup s Remuneratin Cmmittee shall be respnsible fr preparing decisins in relatin t remuneratin, in particular thse that have repercussins n risk and the management f risk by EdRAM and the UCITS, AIFs r management mandates, where thse risks need t be submitted t the Supervisry Bard fr apprval. It shall, at its sle discretin, take int accunt the principles described in this dcument in determining remuneratin packages. It shall assist it in mnitring the Remuneratin Plicy and shall assess the mechanisms adpted t ensure that the remuneratin system reflects all risk and cmpliance categries and the levels f liquidity and assets under management. EdRAM shall ensure that the remuneratin packages f emplyees respnsible fr audit and risk management functins are determined independently f the remuneratin packages f thse emplyees in the business lines whse transactins they apprve r verify, and at an apprpriate level t attract qualified and experienced emplyees. Their remuneratin shall reflect the achievement f bjectives specific t their rle. The remuneratin f senir managers in charge f the risk management and cmpliance functins is directly supervised by the France Grup s Remuneratin Cmmittee ROLE OF THE CONTROL FUNCTIONS The EdRAM cmpliance functins shall ensure that the Remuneratin Plicy cmplies with regulatry requirements. EdRAM s risk management and cmpliance functins shall assess and analyses the impact f the variable remuneratin structure n EdRAM s risk prfile. In ding s, these functins shall validate and assess the risk adjustment data and prvide infrmatin t the Grup s Remuneratin Cmmittee in cnnectin with this bjective. EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE) 5/10

6 The emplyees within the cntrl functins shall be remunerated by reference t bjectives specific t their rle, independently f the perfrmances f the perating sectrs that they mnitr. A central, internal and independent review f the implementatin f the Remuneratin Plicy shall be carried ut at least nce a year by the France Grup s internal audit department (the General Inspectrate) t mnitr cmpliance with the plicies and prcedures adpted by the Supervisry Bard and cmpliance with regulatry rules and recmmendatins n remuneratin packages. 5. PRINCIPLES GOVERNING THE COMPOSITION AND PAYMENT OF REMUNERATION 5.1. PRINCIPLES OF APPORTIONMENT BETWEEN THE FIXED AND VARIABLE COMPONENTS OF REMUNERATION EdRAM seeks t ensure an apprpriate balance between the fixed and variable cmpnents f the verall remuneratin. The fixed cmpnent is a high enugh prprtin f the verall remuneratin that a flexible plicy may be applied t the variable cmpnent, and it is pssible fr emplyees t receive n variable cmpnent. The variable cmpnent may nt be paid thrugh instruments r using methds that facilitate the circumventin f the statutry and regulatry requirements applying t management cmpanies. Guaranteed variable remuneratin is prhibited save where it is ffered as a recruitment incentive, in which circumstances it is limited slely t the first year f emplyment. Severance payments must crrelate t lng-term perfrmance and be designed t ensure that they d nt reward failure VARIABLE ELEMENT OF REMUNERATION The variable cmpnent f remuneratin can be brken dwn as fllws: - a cash cmpnent; - a cmpnent paid in instruments, thrugh the award f units in a representative basket f AIFs and UCITS ( Representative basket f AIFs and UCITS Unit Plan ) intrduced by the Edmnd de Rthschild Wrld Grup based in Switzerland; - a cmpnent paid under a Lng Term Incentive Plan (LTIP) intrduced by the Edmnd de Rthschild Wrld Grup based in Switzerland. EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE) 6/10

7 The allcatin f this variable cmpnent is determined by reference t emplyee categries and is dependent n the achievement f bjectives set at the beginning f the year based n quantitative and qualitative criteria described in detail elsewhere. In additin t individual criteria, the allcatin reflects ther factrs such as the financial capacity f EdRAM, the Edmnd de Rthschild Wrld Grup based in Switzerland and the entire France Grup, tgether with cmpliance criteria and current and future risk factrs. Part f the variable cmpnent f remuneratin is paid immediately and part is deferred. The specific rules fr Identified Emplyees under the AIFMD and the UCITS V Directive are set ut in detail belw PERFORMANCE APPRAISALS The managers assess each emplyee by reference t his/her verall perfrmance, a cmbinatin f achievements and demnstrated behaviur. In additin t quantitative assessment measures, the allcatin f the variable cmpnent f remuneratin als reflects perfrmances assessed by reference t qualitative criteria (nn-financial criteria). This assessment is carried ut annually by way f a physical appraisal meeting and thrugh the use f a cmputerised assessment tl, which ensures that appraisals can be traced. Remuneratin-related decisins may nly be cmmunicated t emplyees prvided that a perfrmance appraisal meeting previusly ccurred, during which perfrmance expectatins and assessment criteria must be clearly explained. The cmputerised tl cntains tw sectins, ne n the achievement f bjectives set fr the emplyee and the ther n cmpliance with the France Grup s values. The team managers use these appraisals as a basis fr prducing variable remuneratin prpsals that reflect the fllwing criteria: - perfrmance f the France Grup - perfrmance f the AM business line - team perfrmance - individual perfrmance - risk and cmpliance criterin. EdRAM is aware f the imprtance f aligning individual prfessinal bjectives with thse f the Edmnd de Rthschild Grup as a whle. EdRAM cnsequently emphasises ethics and cmpliance in the culture it prmtes amng its emplyees. EdRAM des nt apprve f and des nt encurage emplyees t take inapprpriate risks t maximise the variable cmpnent f their remuneratin. EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE) 7/10

8 The levels f the variable cmpnent f remuneratin are based n the cmbined perfrmance f EdRAM, the France Grup and the Edmnd de Rthschild Wrld Grup based in Switzerland, thereby preventing any individual, acting alne, frm having a material impact n the size f the variable cmpnent, r n his r her wn share, by taking an ill-cnsidered risk. The fllwing categries f emplyee are subject t specific perfrmance assessment criteria: - Prtfli managers, fr whm the prprtin f the variable cmpnent paid in cash reflects: investment perfrmances (relative perfrmances cmpared t a benchmark index and the cmpetitive market, ver 1 year, 2 years and 3 years); risk and cmpliance criteria including cmpliance with the prtfli investment rules, their risk limits and cmpliance with market rules; vigilance against mney laundering in the investment prcess. - Emplyees in supprt functins, fr whm the prprtin f the verall variable cmpnent reflects the: perfrmance f thse supprt functins; achievement f bjectives; risk and cmpliance criterin. - Emplyees in sales teams: achievement f sales bjectives (net inflws, level f revenue generated by these inflws, interactins with clients and prspective clients, keeping clients KYC infrmatin up t date); risk and cmpliance criteria including cmpliance with marketing rules cncerning the duty t advise, the regulatry bligatins that seek t prtect investrs and anti-mney laundering rules TERMS ON WHICH THE VARIABLE COMPONENT OF REMUNERATION IS PAID TO IDENTIFIED EMPLOYEES Principles As required by regulatins, the France Grup s Remuneratin Cmmittee ensures that: - at least 50% f the variable cmpnent f remuneratin is equally split between units r shares in AIFs r UCITS, r in instruments linked t shares r in equivalent nn-cash instruments ffering incentives that are as effective as the instruments referred t in the first paragraph, unless the management f UCITS and AIFs represents less than 50% f the ttal prtfli managed by EdRAM, in which case the 50% threshld shall nt apply. T date, EdRAM has paid 50% f the variable cmpnent in units under the Representative basket f AIFs and UCITS Unit Plan. Fr further details n the manner in which the plan perates, please refer t the Plan itself n the EdRAM intranet; EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE) 8/10

9 - payment in similar instruments is intended t ensure that the relevant emplyees interests are aligned with thse f investrs; - at least 40% f the variable cmpnent f the remuneratin is deferred fr at least three years. If the variable cmpnent represents a particularly large amunt, the payment f at least 60% must be deferred. Any variable remuneratin granted in respect f perfrmance in any given year, whether paid in cash, awarded in instruments r deferred, has n bearing n payments r awards in subsequent years Ex-pst adjustment mechanism The vesting f the deferred part f the variable cmpnent is never guaranteed and is als cnditinal n the emplyee cmplying with the applicable criteria during the entire deferral perid, which are based n factrs linked t EdRAM s results and, where applicable, the emplyee s individual circumstances. Emplyees are explicitly infrmed f these cnditins when being awarded the variable cmpnent f their remuneratin CIRCUMVENTING THE REMUNERATION POLICY EdRAM ensures that Identified Emplyees undertake nt t use persnal hedging strategies r remuneratin r liability insurance t cunteract the incidence f alignment with the risks incrprated int its remuneratin agreements. 6. COMMUNICATIONS TO INVESTORS EdRAM s annual reprt must cntain the fllwing infrmatin n all remuneratin allcated in respect f the previus year: - a brad utline f the Remuneratin Plicy which states that investrs may btain mre detailed infrmatin n the website; - the ttal amunt f remuneratin paid brken dwn int fixed and variable remuneratin; - the aggregate amunt f remuneratin paid, brken dwn int emplyee categries. Details f the Remuneratin Plicy must be published n EdRAM s website. Fund KIIDs and prspectuses must cntain infrmatin n the Remuneratin Plicy. EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE) 9/10

10 7. DELEGATION OF MANAGEMENT DECISIONS In the event that it delegates management decisins, the Executive Bdy shall ensure that the delegatees have a remuneratin plicy in place that is as effective as the plicy prvided fr by the relevant AMF psitins and that the delegatin agreements cntain prvisins that seek t prevent any circumventin f the prvisins relating t this Remuneratin Plicy. This dcument may be amended, replaced r annulled by EdRAM at any time. EDMOND DE ROTHSCHILD ASSET MANAGEMENT (FRANCE) 10/10