Hedge fund Man Group has introduced a cap on bonuses for its executive directors, restructured remuneration arrangements for executives and introduced a new sales compensation structure.
Under the terms of its new executive incentive plan, which replaces all existing arrangements for executive director remuneration, annual cash bonuses for this group will be capped at 250% of salary.
The new plan will also introduce a long-term deferred bonus award, which are determined by performance against a balanced scorecard with financial metrics (80%) and non-financial (20%) metrics related to how the company is managed. The award is also subject to assessment over a three-year performance period and awards are deferred for a further three to five years.
Under transitional arrangements to the new plan, the performance period will initially be set at one year, rising to two years for the second year of the plan and three years thereafter. The first awards given under the new plan will be made in 2014 in respect of executive’s performance in 2013.
Man Group has implemented the new executive incentive plan to increase transparency and alignment with the organisation’s shareholders, while aiming to reduce complexity of awards.
The organisation’s Annual report 2012 revealed that it did not award any cash bonuses to its chief executive officer, chief operating officer, other executive directors and executive committee members in 2012.
It also showed:
- Former chief executive officer Peter Clarke earned $994,000 (£659,369) in 2012, down from $6.977 (£4.63) million in 2011.
- Former chief financial officer Kevin Hayes earned $994,000 (£659,369) in 2012, down from $2.435 (£1.62) million in 2011.
- In total, the employer’s executive directors received $3.501 (£2.32) million in 2012, down from $10.455 (£6.94) million in 2011.
The board has also introduced a new internal sales compensation structure effective for 2013 onwards in order to promote asset gathering and retention, while aligning interests on costs.
Phillip Colebatch, chairman of Man Group’s remuneration committee, said: “The remuneration committee has been rigorously balanced in setting 2012 remuneration to reflect employer performance, whilst recognising the need to engage and motivate revenue generators and maintain operating capability to deliver shareholder value over the longer term.
“The remuneration committee’s focus has been to develop executive incentives for 2013 awards to support delivery of the organisation’s strategy.”