Remuneration

Introduction

GAM’s Remuneration Policy is designed to ensure that Gibraltar Asset Management Limited (“GAM”) abides by the Remuneration Code which implements the main provisions of the Financial Services (Investment Firms) (Prudential Requirements) Regulations 2021 (IFPR Regulations) relating to remuneration.

The Directors believe that this Remuneration Policy is:

i-proportionate to the nature, scale and complexity of the risks inherent in the firm’s business model and activities;

ii-gender-neutral. This means that the approach to remuneration is “based on equal pay for male and female work or work of equal value”;

iii-consistent with and promotes sound and effective risk management;

iii-in line with the firm’s business strategy and objectives and takes into account the long-term effects of investment decisions taken; and

iv-contains measures to avoid conflicts of interest, encourage responsible business conduct and promote risk awareness and prudent risk-taking.

Purpose of the Remuneration Code

The aim of the Remuneration Code is to ensure that firms have risk-focused remuneration policies, which are consistent with and promote effective risk management and do not expose them to excessive risk. It expands upon the general organisational requirements.

Adoption, Review and Implementation
Due to the size, nature and complexity of the firm, it has been decided that it is appropriate for the Board to act as the Remuneration Committee. The Board must, in its supervisory function, approve and adopt the Remuneration Policy.

The Board must review (no less than annually) the terms of the Remuneration Policy. The review must take account of any changes to policies, practices or procedures and the changes should be approved by the Board.

The Board is responsible for the implementation of the Remuneration Policy and at least annually, subject it to central and independent internal review for compliance with policies and procedures for remuneration adopted by the governing body in its supervisory function. The periodic review of the implementation of the Remuneration Policy should also assess compliance with the Remuneration Code.

Guidance by the FSC

Investment firms will need to ensure that:

– Governance arrangements are established and that there include a clear organisational structure with well-defined, transparent and consistent lines of responsibility
– Effective processed are established to identity, manage, monitor and report the risks it is or might be exposed to.
– Adequate internal control mechanisms are established, including sound administration and accounting procedures,
– Remuneration policies and practices are adopted that are consistent with, and promote, sound and effective risk management.

Remuneration policies must promote effective risk management

A firm must establish, implement and maintain remuneration policies, procedures and practices that are consistent with and promote sound and effective risk management.

If a firm’s Remuneration Policy is not aligned with effective risk management it is likely that employees will have incentives to act in ways that might undermine effective risk management.
The Remuneration Code covers all aspects of remuneration that could have a bearing on effective risk management including salaries, bonuses, long-term incentive plans, options, hiring bonuses, severance packages and pension arrangements. In applying the Remuneration Code, a firm should have regard to applicable good practice on remuneration and corporate governance.

In considering the risks arising from its remuneration policies, a firm will also need to take into account its statutory duties in relation to equal pay and non-discrimination.

The Board must consider the impact of future risks and uncertainties on the bonus pool, and ensure that these are taken into account when determining future bonus pools.

As with other aspects of a firm’s systems and controls, remuneration policies, procedures and practices must be comprehensive and proportionate to the nature, scale and complexity of the firm’s activities. What a firm must do in order to comply with the Remuneration Code will therefore vary. For example, while the Remuneration Code refers to a firm’s remuneration committee and risk management function, it may be appropriate for the governing body of a smaller firm to act as the Remuneration Committee, and for the firm not to have a separate risk management function.

The Remuneration Code is principally concerned with the risks created by the way remuneration arrangements are structured, not with the absolute amount of remuneration, which is generally a matter for firms’ remuneration committees.

Record Keeping

A firm should ensure that its remuneration policies, practices and procedures are clear and documented. Such policies, practices and procedures would include performance appraisal processes and decisions.

Remuneration Code Staff

Remuneration Code staff comprises categories of staff including senior management, risk takers, staff engaged in control functions and any employee receiving total remuneration that takes them into the same remuneration bracket as senior management and risk takers, whose professional activities have a material impact on the firm’s risk profile.

A firm must:
(1) maintain a record of its Remuneration Code staff in accordance with the general record-keeping requirements; and
(2) take reasonable steps to ensure that its Remuneration Code staff understand the implications of their status as such, including the potential for remuneration which does not comply with certain
requirements of the Remuneration Code to be rendered void and recoverable by the firm.

Fixed and Variable Remuneration

The Directors believe that this remuneration policy complies with certain minimum expectations, including that:

i-The remuneration policy makes a clear distinction between the criteria applied to determine fixed and variable remuneration;

ii-The fixed and variable components of remuneration is appropriately balanced, and fixed pay represents a sufficiently high proportion of total remuneration to ensure the possibility of paying lower, or no, variable remuneration in any particular year; and

iii-When assessing individual performance, both financial and non-financial criteria are taken into account.

GAM Bonus Scheme

The GAM Bonus Scheme is designed to ensure that employees participate in the financial success of the firm. Therefore, no bonus is payable where the firm is loss-making. The intended participants are the Operations staff, Stockbrokers & Investment Managers & Executive Directors from the GAM Structure (Organic Growth).

GAM Pension Scheme

This is open to all permanent employees who have passed their probation period.

Total Salary paid for the year 2022

Total Fixed Remuneration – £128,408.20

Total Variable Remuneration – £74,022.13