Compensation Policy

Introduction

In pursuing a client-focused business model, compensation is fundamental to Cape Capital AG’s ability to attract, retain, reward and motivate the talented individuals needed for our long-term success. Wealth managers, asset managers for collective investments schemes are experiencing significant political and regulatory focus on compensation with detailed guidance for example through the Circular 2010/01 on Remuneration schemes of the Swiss Financial Market Supervisory Authority (“FINMA”), the Code of Conduct of the Swiss Funds & Asset Management Association (“SFAMA”) (MN 43) and the ESMA Guidelines on sound remuneration policies under the Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards depositary functions, remuneration policies and sanctions (“UCITSD”) and Directive 2011/61/EU on Alternative Investment Fund (AIF) Managers (“AIFMD”). Cape Capital AG wishes to ensure that its compensation practice is well understood, and is consistent with emerging compensation regulations and guidelines in markets of the firm’s business activity. This Compensation Policy adheres to compensation principles set out by FINMA and other European regulators and it applies all compensation plans of Cape Capital AG. Cape Capital AG’s performance based compensation approach goes beyond pure financial compensation but also takes into account the objectives and values of the firm’s Code of Conduct and the Responsible Investment Policy. There is particular emphasis on ethics, risk control and compliance as a basis for disciplined business conduct. In line with this, this Compensation Policy provides a detailed description of the development, implementation, management and governance of compensation.

The Board of Directors issues the Compensation Policy and Implementation Standards and assumes responsibility of the Management for implementation and monitoring within Cape Capital AG, whereby it takes into account any input provided by the relevant functions including risk management and compliance.

As part of the annual reporting, the Board of Directors prepares a compensation report including all elements as required by the FINMA Circular 2010/01, which explains the implementation of this Policy and is disclosed to FINMA.

Board of Directors of Cape Capital AG

July 2017

 

Scope and Structure

This Compensation Policy applies in general to all employees of the Company including the Board of Directors. For the purpose of this document, the terms “Cape Capital”, “the Firm”, “the Group” or “the Company” mean Cape Capital AG.

The content of this document shall at no time replace the applicable legal rules, the individual employment agreements. Moreover, this document is not a contract, express or implied, guaranteeing compensation of any kind, and no legal rights or entitlements to receive any kind of compensation may derive from anything stated in this document. This Policy may be amended, modified or withdrawn by Cape Capital without notice.

 

Objectives

Cape Capital’s objectives are to maintain a Remuneration Policy that:

  • Supports a performance culture that is based on merit, and differentiates and rewards excellent performance, both in short and long term and recognizes the Firm’s values;
  • Is consistent with and promotes sound and effective risk management and does not encourage risk-taking which is inconsistent with the risk profiles, management regulations or instruments of incorporation of the Collective Investment Schemes (UCITS and AIF) to which the Company is the Delegated Investment Manager (“the Delegate”);
  • Enables the Company to attract and retain employees, and motivate them to achieve results with integrity and fairness;
  • Is consistent with, and promotes, effective risk management practices and the Firm’s compliance and control culture;
  • Is in line the Firm’s business strategy, objectives, values and interests and the collective investment schemes that it manages and of the Investors of such collective investment schemes including to avoid conflicts of interests;
  • Is approved and regularly reviewed by the Board of Directors and regularly monitored in terms of implementation and effectiveness by the Compensation Committee (“CC”).

 

Compensation System

The Board of Directors determines every year the total pool of compensation for Cape Capital as well as the compensation of the Executive Management and the Heads of the control functions at Cape Capital.

Cape Capital takes a total compensation approach, which is systematically divided in: Fixed Compensation and Variable Compensation and a portion of the Variable Compensation that is deferred.

The composition of Fixed and Variable Compensation is designed to ensure adequate consideration of risk in compensation. It varies from employees to employee depending on their role and responsibility within the Company. The assessment of such risk is carried out and monitored by risk management.

Staff engaged in control functions, in particular risk management, compliance, internal audit, are compensated in accordance with the achievement of the objectives linked to their functions, independent of the performance of the of the business areas they control.

 

Fixed Compensation, which is paid in form of a base salary, assessed on the role, experience and responsibility of the individual within the Company in combination of the employee’s long-term performance, and market positioning.

Variable Compensation. The level of Variable Compensation is a discretionary variable monitory incentive award and entirely at the discretion of the Management of the Company and may be zero in cases of substandard performance of other reasons. The Management decides the level of Variable Compensation based on absolute and relative performance of the Company as well as individual performance objectives of the employee in his or her position within the Company and a variety of other factors.

Compensation transactions relating to new hires or terminations that may entail guaranteed minimum Variable Compensation, sign-on awards or termination payments may be used when fully justified and can be approved by the Board of Directors.

Calculation of Cape Capital’s Variable Compensation pool is an ongoing proves throughout the year and takes into account a multitude of factors, including providing an appropriate risk adjusted rate of return to shareholders; supporting a strong risk management and control culture; rewarding and retaining employees; and aligning the interests of employees and stakeholders.

Deferred Compensation. Those employees and advisors (“the Portfolio Stakeholders”), who are managing or advising one or several of the Group’s collective investment schemes and therefore have a direct or indirect influence on the risk exposure and performance of the respective collective investment scheme, are subject to the Firm’s deferred compensation plan.

Portfolio Stakeholders are subject to defer a substantial portion, in any event at least 50%, of the Variable Compensation. The deferred Variable Compensation Stake consists of cash and shares or units of the respective collective investment scheme. Deferred compensation elements are generally subject to a three year vesting period.

 

Equal Compensation Opportunity

The Group does not tolerate any form of discrimination, in particular discrimination based on ethnical, nationality, gender, sexual orientation, gender identity, religion, age, martial or family status, pregnancy or disability or any other status that is protected by local law.