Fund Manager Compensation Incentive Design So Easy

Mondo Workplace Updated on 2024-01-31

Some netizens asked Lao Liu:

Hu Xijin said on an event forum: "The income of the manager of the public offering has little to do with the rise and fall of the **, even if the person who buys the ** loses a lot, the rate paid is fixed, and their income is not affected." Editor-in-chief Hu thinks that this is unreasonable, "It will make the manager only think about how to expand the scale of the company, not how to help the company make a profit." ”

However, some netizens said: "If the income of the ** manager is adjusted with the profit and loss of the **, this incentive will cause the ** manager to not be afraid of redemption and rush to short-term performance." ”

Do you agree with their point of view?If you are asked to set up incentives for the "** manager", but also with the interests of the "people", what are the good suggestions?

**Manager compensation incentive design is so easy

Let's tell you the truth, the design of the manager's incentive method may be a little more complicated than the general salary design, why?

Because the incentive method of ** managers has its own significant characteristics, according to the "Guidelines for Performance Appraisal and Salary Management of ** Management Companies" (Zhong Ji Xie Zi 2022 No. 209) issued by the China **Investment Industry Association on June 10, 2022), *Manager remuneration is statutory, including the following four parts:

Base Salary;Pay for performance;Welfare and allowances;Medium- and long-term incentives. Let's analyze it together.

The main income of private equity managers is basic salary + performance compensation, which is more focused on performance compensation, because the scale of private equity is generally smaller. The main income of the public offering manager is the basic salary + performance, and the basic salary mainly comes from the management fee, because the scale is relatively large, and it is more focused on the ranking, the higher the ranking, the larger the scale, and the more the management fee, so there is Lao Hu's saying that the public offering only focuses on the scale.

*What is the management fee charged by the company?On an annual basis, the management fee is 15%, escrow fee 025%。The specific calculation method is to add up the management fee + custody fee + others (such as sales service fee), which is not less than 175% of the annual fee is spread over the calendar day of the year, resulting in a daily amortization ratio. Starting from the day after the subscription date of the holder, according to your subscription share, combined with the rise and fall of the market value, the annual fee will be levied on a daily basis, in other words, the more you buy, the more the management fee will pay, and the manager will also take this share.

What is the basic salary of a public offering manager?In fact, the difference is quite large, roughly distributed in the range of 1-5w monthly salary. Take the ** manager with 3-5 years of work experience as an example, the basic salary is roughly between 20-30w per year. In fact, the basic salary here is not fixed, and it is likely to be linked to the management fee.

Since the emergence of the term "performance" in our flower family, the word "performance" has become popular all over the river, inside and outside the Great Wall, taking private equity ** as an example, the performance remuneration of the general ** manager accounts for 20-40%, of course, the starting price is the majority, like this year's ** market such a bear, many *** to ** as the investment object of investment **) is estimated to be about to fall through, natural performance is impossible to talk about.

Let's take the bull market as an example, if the scale of a manager is 300 million yuan, and the excess income is 30 million, the company will take 20% of it will be 6 million, and the manager will take 20% of the 6 million is 1.2 millionIt also depends on the agreement, the agreement between the company and the customer, and the agreement between the manager and the company. Now there are a lot of public to private, why?Because the private placement system is more flexible, but it belongs to the "watch the sky to eat", although the public offering system is rigid, but the drought and flood to ensure income. Here is the focus of Ha, public offering executives, heads of major business departments should buy more than 20% of the current year's performance remuneration, and the equity class shall not be less than 50%;*Managers should buy more than 30% of the performance salary of the current year for their own **, and give priority to buying the public offering ** managed by themselves.

In fact, even if the same position in the same company, the income of the manager may be dozens of times different from each other, and the difference is mainly in the excess income. Public offerings can learn from the flexibility of private offerings and pilot some short-term products that are not linked to scale.

* As a high-pressure job position, managers are constantly in the midst of complex data processing, difficult data judgment, and various rankings and profit competitions, and endure not only hair loss, but also all kinds of mental exhaustion and psychological torture. Pure people regard money as dung, but the manager is the kind of person who turns over in the dung heap every day, since people live so hard, it doesn't hurt to design some high benefits and high allowances for others.

The above options are for reference only, and specific benefits and allowances may vary by company, region, and industry. Don't look at what has been written so much, you really have to hire a "Buffett" to come over, maybe this attraction is not enough, innovative benefits and allowance design, aimed at attracting and retaining better managers, the purpose is to provide them with better security services, create better performance.

Paragraph 2 of Article 21 of the Investment Law stipulates that "the manager of the public offering may implement a professional stock ownership plan and establish a long-term incentive and restraint mechanism".

1) Real stock incentives.

Actual stock incentives include direct shareholding and indirect shareholding, and indirect shareholding is usually carried out by shareholding platforms such as limited partnerships.

2) Imaginary stock incentives.

*The manager does not hold the actual equity, but only stipulates the relevant equity incentive income of the **manager through an agreement.

*Article 9 of the Guidelines for Performance Appraisal and Remuneration Management of Management Companies stipulates that "medium and long-term incentives include equity incentives and cash incentives. Encourage the management company to adopt diversified incentive and restraint measures such as equity, options, restricted equity, dividend rights, etc., which are bound to the long-term development of the company and the long-term interests of holders, and establish a long-term incentive and restraint mechanism". Please keep in mind that the medium and long-term here, the minimum is 3 years.

* The design of the manager's incentive method is one of the core internal control work of the public offering company, usually the public offering company has a sound remuneration committee, led by the board of directors, its professional competence is relatively strong, and the compensation management department is usually able to express different opinions independently of the management.

* Manager incentive design is one of the core content of the company's salary management, the principle is very simple, talk about everyone will, the problem is to combine the company's financial situation, operating conditions, risk prevention and control and development planning and other factors, the incentive policy and program for full research and discussion, put forward professional opinions and down-to-earth suggestions.

Related Pages