Remuneration Policy

1 Purpose

This policy details how Wren Investment Office Limited (The Firm) will manage remuneration in line with its business strategy and ensure a consistency of approach within the firm to attract, retain and reward employee’s for contributing to the Firm’s success, whilst maintaining financial stability and robust and effective risk management.

The Firm is authorised by the Financial Conduct Authority (FCA) and, as such, will act in accordance to the remuneration rules as defined in the FCA Handbook, which will take precedence over the requirements of this policy.

2 Review of Policy

This policy will be reviewed regularly, at least once a year, and amended as considered necessary by the Firm’s Management Body in the event of changing circumstances or regulations.

3 Remuneration review

Remuneration will be assessed annually in accordance with the Firm’s appraisal process. The appraisal process involves objective setting for each employee and a review of performance against the objectives on, at least, an annual basis. The performance against objectives will be used as the basis for any variable compensation awarded.

4 Applicability

The Firm’s policy takes into consideration the Remuneration Code principles set by the FCA in the FCA Handbook and sets out how it will act in accordance with them.

The Remuneration Code aims to ensure the Firm’s remuneration policy is risk focused and promotes sound and effective risk management. It covers all aspects of remuneration including salaries, bonuses, incentive plans, options, severance packages and pension arrangements.

4.1 Remuneration Code staff

All of the Remuneration Code principals apply to all Remuneration Code staff.

Remuneration Code staff, as defined by the FCA, are all employees who have a material impact on the risk profile of the Firm which includes senior management, staff who hold significant influence functions, staff who would be considered to be risk takers, those engaged in control functions and those who receive remuneration packages that are aligned with those received by senior management.

The Firm maintains a record of all employees to whom the Remuneration Code applies, and it has taken steps to ensure that all employees to whom the Code applies understand the implications of their status and the potential for any remuneration that does not comply with the Code to be rendered void and recoverable by the Firm.

The Remuneration Code applies to the following staff:

  • Christopher Kemball NED & Chairman CF2
  • Daniel de Fernando NED & Chair of Investment Committee CF2
  • Alberto Cortina NED CF2
  • Mel Lagomasino NED CF2
  • Michael Zeuner NED CF2
  • Michael Parsons CEO CF1, CF3 & CF30
  • Stephen Doherty COO CF1, CF10, CF11 & CF30
  • Drew McNeil Head of Client Relationships CF1 & CF30
  • Eirian Jones Head of Investment Research CF1 & CF30

4.2 All staff

The Firm has taken the decision that the Remuneration Code will apply to all employees.

5 Remuneration Code Principles – applicable to all staff

5.1 Remuneration structure

Employees’ remuneration usually consists of a base salary (or fixed compensation) and, in some cases, performance related variable compensation.

Base salary compensation is predominantly based upon the employee’s professional experience and organisational responsibility as set out by their job description and terms of employment

All base salaries are recommended by the Remuneration Committee with direction from the Board.

The Firm currently offers additional incentives in the form of variable compensation. Variable compensation will not be granted until specific revenue targets have been met. Variable compensation terms will differ depending on the role and seniority of the employee and will take into account the quality of services provided to customers as well as revenue targets being achieved. The firm monitors the quality of service provided to customers throughout the year and formal discussions are held with employees on at least an annual basis. Any variable compensation received will be on a discretionary basis.

Variable compensation will only be awarded when it is sustainable to the Firm’s overall financial situation and taking into account any known future events, the performance of the firm, the business unit and the employee.

5.2 Risk Management and risk tolerance

In order to promote effective risk management and discourage risk taking that exceeds tolerated levels, the Firm will consider the following when awarding variable compensation:

  • Key Risk Indicators, assigned to teams and individuals
  • Performance against risk objectives set
  • Compliance by employees to regulations and best practice

The Firm’s risk management strategy and tolerance is stated in its Risk Framework. Operating within the scope of the Firm’s risk framework is a pre-requisite to the award of any variable compensation.

5.3 Supporting business strategy, objectives, values and long-term interests of the Firm

In order to encourage behaviours in line with the business strategy, objectives, values and long-term interests of the Firm, the Firm will consider the following when awarding variable compensation:

  • Performance against business objectives set
  • Behaviours displaying the core values of the Firm
  • Treating customers fairly

5.4 Avoiding Conflicts of Interest

To avoid conflicts of interest, variable compensation is not linked solely to sales or volumes but determined by the employee’s performance against set objectives which will take into account a number of different factors including a good standard of compliance, treating customers fairly and quality of services to clients. This will ensure that an employee does not have an incentive to favour their own interests, or that of the Firm to the detriment of a client.

The Firm recognises that conflicts can arise where employees are responsible for determining the remuneration of their own business areas, however the scale of the firm means that this may be unavoidable. The Remuneration Committee will be responsible for determining all remuneration packages across the company with approval for their own remuneration sought from others on the Management Body.

5.5 Governance

The Management Body will review annually, at least, the remuneration policy and is responsible for overseeing its implementation. On an annual basis an independent internal review of compliance with remuneration policies will be carried out by the Compliance Officer.

Due to the size of the Firm, the Management Body will act as the Remuneration Committee. The Remuneration Committee are responsible for decisions regarding remuneration, taking into account the long-term interests of the Firm, it’s shareholders and other stakeholders, and the public interest.

The Firm will explain its compliance with the Remuneration Code on its website.

5.6 Profit based measurement and risk adjustment

When considering variable remuneration, the Firm will principally base the assessment of financial performance of the Firm on profits, adjusted for current and future risks. Where there is negative financial performance of the Firm, then total variable remuneration will be considerably smaller, both for current remuneration and reductions in payments of variable compensation previously earned.

The Firm will ensure that any measurement of performance used to calculate variable remuneration takes into account all types of current and future risks as well as the cost and quantity of the capital and liquidity required. The Firm will also take into account the need for consistency with the timing and likelihood of future potential revenues incorporated into current earnings.

The Firm will keep a record of the risk adjustment techniques and measures it uses and will include risks such as reputation, conduct, client outcomes, values and strategy. The risk management function will validate the risk adjustment techniques at a meeting with the Management Body.

5.7 Pension policy

The Firm is aware of the relevant legislation relating to workplace pensions and offer a pension, however all current employees have decided to opt-out.

5.8 Personal investment strategies

Employees are made aware that they may not use personal hedging strategies or liability related contracts of insurance to undermine the risk alignment effects within the Firm’s Remuneration Policy.

5.9 Early termination payments

The Firm will ensure that any payments relating to early termination of a contract reflect the performance achieved over time and do not reward failure or misconduct.

6 Remuneration Code Principles

6.1 Assessment of performance

The Firm will base the total amount of remuneration on an assessment of the performance of the employee, the business unit and the Firm’s overall results.

When assessing individual performance, financial as well as non-financial criteria will be taken into account, including effective risk management, compliance with regulations and appropriate conduct in line with the Firm’s values. Poor performance in non-financial criteria will override financial performance.

The criteria that will determine any variable remuneration will include:

  • The Firm’s performance
  • Business unit performance
  • Employee performance against objectives
  • Effective risk management
  • Compliance with regulations
  • Adherence to the Firm’s values
  • Treating customers fairly
  • Quality of service provided to clients

The Firm will base the assessment of performance on a multi-year framework to ensure that the assessment is based on a longer-term performance and that payment of the performance based variable components will be spread over a period taking into account the business cycle of the Firm and its business risks.

6.2 Ratios between fixed and variable components of total remuneration

There are no defined ratios between fixed and variable components of total remuneration. Any bonus payments received will be on a discretionary basis.

6.3 Control functions

The remuneration of the risk management and compliance functions will be overseen by the Remuneration Committee. The Remuneration Committee will ensure that the method for calculating the remuneration of the compliance function will not or will not be likely to compromise their objectivity.

The Firm’s risk management and compliance functions will have input into setting the remuneration for other business units and individuals, especially if there are concerns about behaviours or the riskiness of business undertaken.

The scale of the Firm means that employees who hold control functions are not always independent from the business units that they oversee, however they have the appropriate authority to take action where necessary.

The Firm ensures that remuneration packages for control function employees are adequate to ensure that the quality and experienced staff are attracted and that the package is dependent on the achievement of the Firm’s objectives and the objectives linked to the business areas that they control.

6.4 Remuneration and capital

The Firm will ensure that the total variable compensation awarded does not limit its ability to strengthen its capital base by ensuring that the arrangements are sufficiently flexible and allowing resources to be directed towards the capital base if required.

6.5 Non-compliance with remuneration code

The Firm will ensure that any variable compensation is not paid through any means that facilitate non-compliance with, or avoidance of, the Remuneration Code.

7 Sales Staff Remuneration

The Firm provides investment services to clients, and as such, in addition to following the Remuneration Code principles, it will ensure that it does not remunerate its sales staff or assess their performance in a way that conflicts with its duty to act in the best interests of the client. The Firm will not use sales targets or other arrangements that incentivise its employees to recommend a particular financial instrument when another would better suit the client’s needs.

The Firm will ensure, for all employees with a direct or indirect impact on investment or ancillary services:

  • That clients are treated fairly, and their interests are not impaired by the remuneration practices
  • That remuneration does not incentivise employees to favour their own or the Firm’s interest over that of the client
  • The Remuneration Committee takes advice from compliance before approving the remuneration
  • The Remuneration Committee are responsible for the implementation of the Remuneration Policy and monitoring of the related compliance risks
  • Remuneration will be based on both qualitative and quantitative criteria, reflecting compliance with the regulations, fair treatment of clients and the quality of service provided to clients
  • A balance of fixed and variable compensation so that the remuneration structure doesn’t favour the interests of the Firm or its employees over the interests of the client

8 Record keeping

The Firm will keep records of its remuneration policy and procedures which will include performance appraisal processes and decisions.

9 Breaches of Remuneration Policy

Any breaches of the Remuneration rules will be recorded on the Firm’s breach log in conjunction with its Regulatory Breach policy.