This is an extract of the Remuneration Policy (“Policy”) adopted by ReAPS Asset Management Limited (“ReAPS”), the Investment Manager of APS Funds SICAV plc, in compliance with Directive 2014/91/EU and ESMA Guidelines.
This Policy is effective from October 2022.
The objective of the Policy is to set out the provisions adopted by ReAPS to ensure that it maintains and applies a remuneration process which does not impair compliance its duty to act in the best interest of its clients, which identifies and manages any conflicts of interest, promotes sound and effective risk management and does not encourage risk-taking which is inconsistent with its risk profile or that of its clients. ReAPS together with APS Bank p.l.c. forms part of APS Group which adopts a Remuneration Policy and applies to all its subsidiaries. The provisions of this Policy are, on a best effort basis, aligned with APS Group Remuneration Policy.
II. Application of the Policy
The requirements of the Policy apply to all those staff of ReAPS whose professional activities have a material impact its risk profile or the client it manages (“Identified Staff”) including any delegates. As of the date of the Policy, ReAPS does not delegate the investment management function to third parties.
ReAPS shall comply with the following principles in a way and to the extent that is appropriate to their size, internal organisation and the nature, scope and complexity of its activities –
- The Policy is in line with the business strategy, objectives, values and interests of ReAPS and the clients it manages, and includes measures to avoid conflicts of interest,
- The Policy is adopted by the management body of ReAPS in its supervisory function, and that body adopts, and reviews at least annually, the general principles of the remuneration policy and is responsible for, and oversees their implementation,
- Staff engaged in control functions are compensated in accordance with the achievement of the objectives linked to their functions, independently of the performance of the business areas they control,
- Where remuneration is performance related, the total amount of remuneration is based on a combination of the assessment as to the performance of the individual and of the business unit or client concerned, considering financial and non-financial criteria,
- The assessment of performance is in a multi-year framework appropriate to the holding period recommended to the client,
- Guaranteed variable remuneration is exceptional, occurs only in the context of hiring new staff and is limited to the first year of engagement,
- Appropriate balancing of the fixed and variable components of total remuneration such that the fixed component represents a sufficiently high portion of the total remuneration and there is the option of paying no variable remuneration,
- Payments relating to the early termination of a contract should reflect performance achieved over time and should be designed in a way that does not reward failure, and
- Staff are required to undertake not to use personal hedging strategies or remuneration and liability related insurances to undermine the risk alignments effects embedded in their remuneration arrangements.
IV. The application of the ‘Proportionality Principle’
ReAPS has dis-applied the requirements relating to the pay-out process of the variable remuneration and the requirement to establish an internal remuneration committee based on the proportionality principle.
V. Remuneration Structure
a. Remuneration Structure for Directors
The remuneration of the Chairman and the Non-Executive Directors shall be fixed and set at a level which is (i) competitive with the rest of the market, (ii) aligned with the competencies and contribution required, and (iii) reflective to the extent of responsibilities and the number of board meetings and committee membership/s.
b. Remuneration Structure for Staff
The remuneration of the staff members shall be based on the following criteria:
- Fixed Remuneration: The base salary shall provide a predictable base level of income reflecting each staff member’s level of responsibility, capabilities, skills and experience. Base salaries shall be reviewed annually. Base salaries may also be reviewed when there is a material change in the remuneration levels of comparable roles in the respective market.
- Variable Remuneration: Staff members may have a variable component to their remuneration. The relation between fixed and variable remuneration shall not exceed twenty-five (25) per cent of the fixed component. The variable portion shall be clearly connected to the work and performance of the staff member, the performance of ReAPS and APS Group. The goals shall be based on factors that support ReAPS and APS Group’s long-term strategy and business objectives. Control functions shall be adequately compensated in accordance with their own objectives and not in relation to the performance of the business areas they control.
VI. Management of Conflicts of Interest
ReAPS has adopted this Policy aimed at addressing any conflicts that may arise between its staff and clients, the staff and ReAPS and between one client and another/others.
VII. Annual Review
The Policy is subject to an annual review. ReAPS’ Board of Directors will take appropriate measures to address any deficiencies, if any.
VIII. Disclosure Requirements
The Annual Report for a UCITS managed by ReAPS is to include the total amount of remuneration for the financial year, split into fixed and variable remuneration paid by ReAPS to its Identified Staff, and the number of beneficiaries, and where relevant, any amount paid directly by the UCITS itself, including any performance fees or carried interest.
IX. SFDR Principles
ReAPS’ approach to remuneration, does not encourage excessive risk-taking with respect to sustainability risks.