1. Purpose and scope

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The remuneration policy of FCM (the “Remuneration Policy”) aims to avoid excessive risk-taking behaviour. Remuneration should never result in perverse incentives for members of the staff of FCM (“Staff Members”). The Remuneration Policy is meant to strike a balance between remunerating FCM’s Staff Members in line with peers and market practice, taking client interests into account and ensuring that remuneration does not impede FCM solidity. A core value of FCM is that clients come first, meaning that only if clients are successful, FCM and its employees will be successful. Therefore, the Remuneration Policy aims at aligning the personal objectives of Staff Members with the long-term interests of FCM and its clients.

 

The Remuneration Policy governs all the types of remuneration (fixed remuneration and variable remuneration) that FCM grants to its Staff Members. 
 

 

2. General remuneration provisions

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The following remuneration principles and rules apply to all Staff Members:

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2.1.  No circumvention

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FCM will not contribute to, propose or implement structures, proposals, contracts or vehicles that would facilitate or serve the purpose of circumvention of the remuneration rules set by FCM.

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2.2.  Main principles

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With respect to remuneration within FCM, the following main principles apply:

• Bonus pool
  FCM will yearly at the end of the fiscal year determine the maximum amount of total variable remuneration that can potentially be awarded in the yearly back-looking award process (i.e. a bonus pool). Given the small size and relatively simple nature of its activities, the total bonus pool is always determined by the overall profitability of FCM taking into account any regulatory capital requirements. 

• Individual variable remuneration
  After determining the bonus pool, FCM will determine the individual variable remuneration per Staff Member.

• 20% Bonus cap
  The Variable Remuneration component for an individual working under the responsibility of Farringdon will not exceed the 20% of the fixed remuneration that the individual received in that year. Only in exceptional cases will Farringdon consider deviating from the 20% bonus cap, ensuring the following criteria from the Wft are met:
   

  • Remunerations is not derived from a Collective Labour Agreements (CAO). Note that Farringdon Staff remuneration is not derived from a CAO. So this criteria is always met.

  • The average proportion of the Variable Remuneration of Staff does not exceed 20% ; additionally;

  • The Variable Remuneration of a specific employee cannot exceed 100% of its Fixed Remuneration in that year.

  • The specific employee may not operate in a control function or a sales or advice function towards retail consumers. Note that Farringdon only has professional clients.

  • The exceptions have to be reported on a yearly basis to the AFM. 

 

• Remuneration components
  Various remuneration components are combined to ensure an appropriate and balanced remuneration package. The remuneration components are:
   

  • Fixed Remuneration, including salary, pension contributions and other benefits, based on the role and position of the Staff Member, including professional experience, responsibility, job complexity and local and international market conditions;
    
    Farringdon does not provide any enhanced pension benefits to Staff. 
     

  • Variable Remuneration (either cash or participations in Farringdon).​
     

Staff Members cannot use personal hedging strategies or insurance to undermine the risk alignment effects embedded in their remuneration arrangements. Similarly, Farringdon will not accept any request to pay Variable Remuneration through vehicles or methods designed to facilitate non-compliance with the Remuneration Policy

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• Fair treatment of Clients 
  FCM fully takes into account the interests of all clients of FCM, with a view to ensuring that clients are treated fairly. Their interests may not be impaired by the remuneration practices adopted in the short, medium or long term. Remuneration may not create a conflict of interest or incentive that may lead Staff Members to favor their own interests or FCM interests to the potential detriment of any client. As a result, in order to avoid product pushing, Variable Remuneration is linked to several factors, including the contribution of the Staff to the company, the quality of services delivered to clients, the number of complaints received from clients.

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2.3.  Guarenteed Variable Remuneration

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Variable remuneration is at the discretion of FCM. Guaranteed variable remuneration will only be considered in the context of hiring new staff and may in that context only be applied for the first year of employment if all other conditions of the Remuneration Policy and the applicable laws are met.

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2.4.  Severance payments

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Payments related to the early termination of a contract reflect performance achieved over time and are designed in a way that does not reward failure. This does not preclude termination payments in situations such as early termination of the contract due to changes in the strategy of the company, or in merger and/or takeover situations. The severance payment of a managing partner will not exceed 100% of the annual fixed salary of such managing partner.

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2.5.  Pension schemes

 

FCM will offer its Staff Members a basic mandatory pension scheme.

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2.6.  Performance measurement
 

FCM has a performance measurement process, the outcome of which influences the height of the variable remuneration of a Staff Member. 

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In general, financial criteria will not be of decisive importance, and qualitative factors (such as teamwork, dedication, diligence, compliance, client satisfaction, quality of work, development and technical skills) will be at least as important. Negative non-financial performance, in particular unethical or non-compliant behaviour, overrides any good financial performance and diminishes the Staff member’s variable remuneration. At least 50% of the criteria are qualitative. 

For risk takers, not exceeding risk limits, risk awareness, focus on risk-adjusted returns and any operational and investment incidents will be important factors in the review process. 

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For control functions, links to the performance of FCM will be avoided in the performance assessment.
 

2.7.  Claw back and malus

In case of ‘bad leaver’ situations, in case of unlawful behaviour or misconduct or in case of any behaviour or action of the relevant Staff Member which has led to a substantial deterioration in the financial position of FCM, a claw back or malus mechanism will apply by which any Variable Remuneration which is unjustified in hindsight, can be lowered or clawed back. This is to the discretion of the management.

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3. Remuneration in 2023

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In the past financial year, a total of €55,000 in variable remuneration was paid out to staff. The number of employees with a remuneration exceeding €1 million was zero. 

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4. Sustainability

Our remuneration policy aims at aligning the personal objectives of staff members with the long-term interests of Farringdon Capital Management and our clients. In addition, the remuneration policy is consistent with and promotes sound and effective risk management and does not encourage risk-taking that exceeds the level of tolerated risk, including sustainability risk, of Farringdon Capital Management and our clients. More information can be found here: https://www.farringdoncap.com/sustainability 

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