Annual Bonus Plan Structure - Retail Fund Management Arm of Larger Investment Management Business

Brief:

Following internal discussions on the introduction of a new incentive remuneration policy for their retail fund managers, advise the Board on the structure of and the key performance indicators for a new annual bonus plan including stock/fund deferral/stock option element.

Solution:

using existing market knowledge, provide advice on the design features of the annual bonus plan for star and other fund managers, focusing on the key performance indicators
using market based data, provide advice on quantum of bonus payable, as a percentage of salary for each grade, at different levels of performance
advise on concept and tax implications of deferral, including a mechanism enabling managers to choose the amount of the deferral element and the deferral vehicle e.g. parent company stock or stock options, own fund or basket of funds, or cash
prepare financial models to determine aggregate quantum of payout under the plan under various “what if” scenarios
prepare detailed plan specification, including details on treatment of leavers and joiners
oversee implementation.

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