Remuneration Policy – January 2022
Performance Year ending 31 December 2022
Time Partners Limited (the “Firm”) is subject to the MIFIDPRU Remuneration Code as set out in SYSC 19 of the FCA handbook. The firm is a small non-interconnected (“SNI”) Firm. This policy covers all of the staff at the firm and is reviewed on an annual basis.
The firm seeks to provide employees with sufficient remuneration to allow the firm to attract high quality staff and allow them to be appropriately rewarded for their roles. This, without prejudicing the interests of the firm’s clients or the long-term sustainability of the firm and its capital base.
This Policy is gender neutral.
Compliance with the MIFIDPRU Remuneration Code
1) The Firm’s remuneration policy must:
a) Be proportionate to the size, scope and complexity of its activities
The firm is relatively small with limited scope and complexity compared to many firms regulated by the FCA. The firm’s remuneration policy is similarly simple, with a single remuneration structure applying across the entire firm.
b) Be consistent with and promote sound and effective risk management
In an advisory based business that does not take balance sheet risk, risks are by definition relatively low. By designing a remuneration structure that applies across the whole firm and is based on value created by the whole firm, the firm promotes a culture of working as a cohesive unit by sharing risk and reward, ensuring that the Executive Committee works together to manage and mitigate those risks across the business. This remuneration policy should be considered in the round alongside the Firm’s Compliance Manual, Conflicts of Interest Policy, Product Development Policy and training, appraisal and monitoring programmes as part of an overall risk management structure.
c) Be in line with the Firm’s business strategy and objectives
The firm’s strategy is focussed on providing the best possible service to clients across the broad spectrum of their interests in private markets, impact and sustainability. The remuneration policy, by linking the performance of all aspects of the business, supports this holistic client facing approach.
d) Contain measures to avoid conflicts of interest, encourage responsible business conduct and promote risk awareness and prudent risk-taking
Responsible business conduct is promoted by the review process and the firm’s values which together have an impact on variable remuneration awarded to individual members of staff. There are limited opportunities for imprudent risk taking and the whole-firm approach to variable remuneration ensures that members of the Executive Committee consider risk across the whole business in their decision-making processes. The Firm has in place a number of existing procedures, specifically within the Firm’s Compliance Manual, which are structured to avoid and manage conflicts of interests, including but not limited to: material interests, outside activities and compensation, treating clients fairly, gifts and benefits and detailed procedures on managing conflicts of interest. All decisions regarding remuneration are taken in consideration of the long-term interests of the Firm, its staff, members and clients, specifically in the context of identifying and managing all potential conflicts of interest.
2) Governance and oversight:
a) Staff with control functions must be independent from business units they oversee and be remunerated according to objectives linked to their functions
Staff with control functions are limited to the CEO and the COO. In a firm the size of Time Partners, there is limited potential or requirement to entirely separate these two individuals from the business they oversee. However, any risk created by this approach is mitigated by the fact that remuneration for the CEO is determined directly by the Board on advice from the Remuneration Committee who are free to set objectives linked to relevant control functions and any other functions as appropriate.
b) Remuneration of senior staff in risk management and compliance functions must be directly overseen by the remuneration committee
All risk management and compliance functions are carried out by the CEO and COO. The CEO’s remuneration is directly overseen by the Board as advised by the Remuneration Committee.
3) Fixed and variable remuneration:
Remuneration for all staff is divided into four components: base salary, benefits, options and participation in the bonus pool. Base salary and benefits are considered fixed remuneration. The award of options and payments from the bonus pool are considered variable remuneration.
a) The remuneration policy must make a clear distinction between the criteria applied to determine fixed and variable remuneration
Fixed remuneration is determined by experience and aptitude for the role and reflects the staff member’s professional experience and organisational responsibility as set out in their terms of employment. It is permanent, pre-determined, non-discretionary, non-revocable and not dependent on performance.
Variable remuneration is determined by contribution and performance in the year. It reflects the long-term performance of the staff member as well as performance in excess of the staff member’s terms of employment.
b) Variable remuneration must not affect the Firm’s ability to ensure a sound capital base
The bonus pool provides for a certain proportion of the Firm’s annual profits to be retained for the maintenance of a sound capital base. In addition, the Firm reserves the right to defer or cancel payments from the bonus pool should requirements so dictate.
The Firm’s Policy is that the fixed component will represents a sufficiently high proportion of the total remuneration to enable the operation of a fully flexible policy on variable remuneration, including the possibility of paying no variable remuneration component.
The Board fully acknowledges its responsibilities with respect to the Remuneration Policy, including its overriding responsibility to ensure that the Firm’s remuneration policy is in compliance with the requirements of the MIFIDPRU Remuneration Code. The Board review this Policy on an annual basis, this being sufficiently frequent given the risks faced by the firm.
The Board considers the current arrangements to be proportionate, given: (i) the low risk nature of the Firm’s business; (ii) the small size of the Firm and clear visibility of behaviour and contributions to the organisation that is available to the Board; and (iii) the transparency to the Board of the process for determining remuneration and its outcome.
The Firm has a separate Remuneration Committee whose purpose is to advise the Board on remuneration matters. It is composed of executive and non-executive members of the Board and is advised by external consultants MM & K.
Remuneration decisions for the Directors, CEO and other employees
Base salary and bonus pool allocation for Directors and employees is approved as per the table below:
|Directors & CEO||Board (as advised by the Remuneration Committee)|
|Other members of Executive Committee||CEO|
|Other employees||Executive Committee (delegated to CEO, CFO & COO)|
The Firm’s total bonus pool is set by the Board as advised by the CEO. In determining the bonus allocation any staff member, the following are considered:
1 – Effective management and operation of the Firm (where in a management role);
2 – Delivering on corporate strategy (where in a management role);
3 – Contribution to revenue generation;
4 – Non-financial performance criteria, including adherence to the firm’s compliance requirements. These form a significant part of the part of the performance assessment process and may, where appropriate, override any financial criteria. They will include metrics on conduct and include how far the individual adheres to effective risk management and complies with relevant regulatory requirements.
The assessment of staff performance is integral with the firm’s appraisal processes.
Individual and total payments of variable remuneration must not affect the Firm’s ability to ensure a sound capital base or prejudice the interests of clients. All awards of options are approved solely by the Board, decisions being made on the basis of the same criteria.
The Board fully believes that its Remuneration Policy is fully aligned with the Firm’s clients and that the success of the Firm and subsequent payment of variable remuneration is correlated to the quality of service given and the achievement of the Firm’s clients’ objectives.
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