Remuneration policy of VP Fund Solutions (Liechtenstein) AG
With regard to its remuneration principles and practices, VP Fund Solutions (Liechtenstein) AG (hereinafter: VPFSLI) is subject to the supervisory provisions governing fund management companies laid down in the Liechtenstein Law on Undertakings for Collective Investment in Transferable Securities (UCITSA) and the provisions governing Alternative Investment Fund Managers set out in the Law on Alternative Investment Fund Managers (AIFMA). VPFSLI has laid down the details in an internal directive on remuneration principles and practices, the aim of which is to establish a consistent and sustainable system of remuneration without creating misplaced incentives to take on excessive levels of risk. VPFSLI's remuneration principles and practices are reviewed by the Board of Directors on at least an annual basis to ensure that they are appropriate and comply with all relevant legal provisions. They include both fixed and variable remuneration components.
More on the remuneration policy of VP Fund Solutions (Liechtenstein) AG
VPFSLI has adopted a remuneration policy which is compatible with its business and risk policy. In particular, no incentives to take on excessive levels of risk are created. When calculating the variable remuneration component, account is taken of the VPFSLI's overall results and/or of the performance of the individual employee and his/her department. With regard to the achievement of objectives set in personal performance appraisals, particular emphasis is placed on sustainable business development and protecting the company against excessive risks. The variable remuneration components are not linked to the performance of the funds managed by VPFSLI.
Variable components are additional and voluntary payments by VPFSLI which are a minor part compared to the fixed salary component. Payment of variable components is profit and performance related. When exceeding a de minimis limit, parts of the variable components of employees whose activities have a material influence on the overall risk profile of VPFSLI and the funds it manages (so called “risk-takers”) will be retained and invested in stocks of the parent company VP Bank AG. Therefore, the system ensures that no employee is significantly dependent on the variable remuneration component and that an appropriate relationship exists between the variable and fixed components. The fixed salary component is set at a level which ensures that full-time employees can cover their cost of living with the fixed component alone (taking standard market salaries into account). When assigning the variable remuneration component the Board of Directors have the final say. Responsibility for reviewing the remuneration principles and practices rests with the Board of Directors.
For the members of the Management Board and the risk-takers, special arrangements apply. With regard to these risk-taker employees, the Board of Directors carries out a review on at least an annual basis to check whether other functions have an especially significant influence on the risk profile. For the purposes of this review, exerting an especially significant influence on one or more individual funds counts as a criterion. The remuneration of employees performing the identified risk-taker functions normally conforms to the policy described here, with particular emphasis on risk assessment. For the members of the Management Board, responsibility for setting objectives and measuring their achievement rests largely with the Board of Directors. For other risk-takers it rests with the Board of Directors working closely with the Management Board.
Remuneration policy of VP Fund Solutions (Luxembourg) SA
VP Fund Solutions (Luxembourg) SA (hereinafter referred to as "VPFLU") has established, implemented and maintains a Remuneration Policy. The purpose of this policy is to set out the position and principles of VPFLU in respect of the remuneration of its Staff Members. The Policy reflects VPFLU’s objectives for good corporate governance as well as sustained and long-term value creation. It ensures that VPFLU is able to attract, develop and retain high-performing and motivated employees in a competitive labour market by acting in the best interests of the funds’ investors.
More on the remuneration policy of VP Fund Solutions (Luxembourg) SA
The amounts of fixed and variable compensation reflect both the complexity and size of our management company. To determine the amount of the variable compensation pool, we are guided by a sustainable and risk-adjusted approach. We are committed to address the conservative risk culture of VPFLU in the payment system and we offer our employees an attractive but relatively moderate variable compensation. In view of the overall package we pay a fixed income and fringe benefits in line with Luxembourg market practices. It is our declared goal to define the remuneration packages of VPFLU’s Staff Members in such a way that the fixed component is sufficient to allow them a decent life even without variable remuneration.
VPFLU defines identified staff as categories of staff, including senior management, risk takers, 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 VPLFU’s risk profile or the risk profile of the Fund that it manages. Qualitative and quantitative criteria are thus used to assess individual performance as basis for variable remuneration. The balance between both depends on the task and responsibilities of each Identified Staff.
The remuneration of the Control Functions is independent from the performance of the business areas they control. The variable remuneration of Control Functions takes into account the achievement of quantitative as well as qualitative objectives which reflect their management skill, the quality of control done and the respect of internal rules and processes.
The remuneration of the Control Functions is under the direct supervision of and will be approved by the Board of Directors, upon recommendation of the Senior Management of VPFLU.
VPFLU ensures that the entities to which portfolio management or risk management activities have been delegated are subject to regulatory requirements on remuneration that are:
- Equally as effective as those under the AIFM Law and the UCITS Law, or
- That appropriate contractual arrangements are entered into to ensure there is no circumvention of the remuneration rules with respect to payments to identified staff within the delegate.
The Board of Directors of VPFLU will monitor compliance with the remuneration policy on an annual basis. This will include alignment with the business strategy, objectives, values and interest of VPFLU and the Funds it manages as well as measures to avoid conflicts of interest. Furthermore, at the beginning of each compensation period, the Board shall define clear and measurable objectives that will be the basis of the annual assessment.
Disclosure and Communication
All relevant employees of VPFLU will be informed of this Remuneration policy and any change thereto. VPFLU shall ensure common, uniform and consistent application of remuneration principles set out in this policy and will provide periodic disclosure on remuneration in the annual report of the Funds in accordance with the requirements of the AIFMD and UCITS V Directive.
Investors may request free of charge additional information as well as a paper copy of the remuneration policy by writing to VPFLU.