W&W Asset Management Dublin DAC (“WWAMD” or the “Firm”) remuneration policies and procedures are consistent with:
- ESMA Guidelines on sound remuneration policies under the AIFMD;
- ESMA Guidelines on sound remuneration policies under the UCITS Directive; and
- The Firm’s strategies for sustainability and Environmental, Social, & Corporate Governance (“ESG”) and the requirements of the Sustainable Finance Disclosure Regulation (EU) 2019/2088 ("SFDR").
Our policy promotes sound and effective risk management and does not encourage risk-taking that may be inconsistent with the risk profile of the Firm. The Firm ensures that any Delegate to whom such requirements also apply pursuant to the ESMA Remuneration Guidelines will have equivalent remuneration policies and practices in place. The Designated Person with responsibility for Regulatory Compliance ensures the Remuneration Policy is reviewed by the Board on at least an annual basis.
In compliance with SFDR the Firm has published on its website W&W Asset Management Dublin (ww-amd the strategies used for integrating sustainability risks into the investment decision-making processes and the main adverse sustainability impacts of investment decisions on sustainability factors. The Firm’s remuneration policy is in line with the Firm’s and W&W Group's business strategy and its sustainability mission statement. The business strategy incorporates corporate values and culture and is geared towards long-term and sustainable management and the assumption of social responsibility.
2. Categories of staff
In accordance with ESMA Guidelines, WWAMD has identified individuals whose professional activities have a material impact on the Firm’s risk profile as well as risk profile of the UCITS and AIF it manages. The “identified staff” includes:
- Executive Directors; and
- Senior Management.
Non-executive Directors receive a fixed fee only and do not receive performance-based remuneration therefore avoiding potential conflict of interest.
3. Remuneration structure
A remuneration takes a form of:
- Fixed remunerationis determined on the basis of the role of the individual employee, including professional experience, qualifications, responsibility, job complexity, and local market conditions and is specified in the employee’s contract of employment.
- Variable remunerationis performance-based remuneration motivates and rewards employees in their specific roles, that enables WWAMD to meet its objectives, such as strengthening long-term customer relations, sustainability, generating income and shareholder value and meeting its statutory and regulatory obligations.
The variable remuneration, if any, may be performance-related and is paid at the Company’s discretion. i.e. variable remuneration is not guaranteed and is based on a combination of the individual employee’s performance and the overall performance the Firm.
The measurement of performance, as a basis for variable remuneration, shall include a downward adjustment for exposure to current and future risks, meeting sustainability and ESG objectives, the performance of an individual employee considering financial and non-financial criteria.
Variable remuneration includes both individual and firmwide business objectives, where applicable, designed to promote the long terms success of the Firm and meet certain sustainability and ESG targets. The level of payment of variable remuneration may be adjusted to the extent these targets are achieved.
The Board of Directors determines a maximum percentage of performance-based remuneration relative to the fixed remuneration and a deferred component of 3 to 6 years aligned with the Firm’s risk profile, time horizon and the activities of the individual employee.
The variable part of remuneration of employees engaged in the control functions such as the Risk, Compliance or Internal Audit functions shall be independent from the operational performance of the Firm to preserve independence of the control functions.
- Pension contributionWWAMD has established an occupational pension scheme. The scheme is a defined contribution scheme, to which the Firm contributes a percentage of each employees’ annual salary. The level of the Firm’s contribution is determined by the Board of Directors.
4. Disapplication of certain provisions of the ESMA Guidelines
In accordance with the proportionality provisions and of the Regulations, together with the risk profile, appetite and risk strategy of the Manco and each of its Managed Funds, taking into account a non-exhaustive combination of its size, nature and the, scope and complexity of its activities, together with any other relevant criteria and within the limits of the ESMA Guidelines, the Board has dis-applied the following requirements of the ESMA Regulations and the Guidelines in relation to the following:
- variable remuneration in instruments;
- ex post incorporation of risk for variable remuneration (together, with the immediately foregoing bullets points, the Pay-out Process Rules); and
- the requirement to establish a remuneration committee (see below).
With regard to the ESMA UCITS Guidelines, the Board notes that these guidelines (unlike the ESMA AIFMD Guidelines) do not offer any guidance as to whether the application of the proportionality principle may enable management companies such as the Manco to dis-apply the specific requirements above, however, in a letter to the European Union law-making institutions published alongside the ESMA UCITS Guidelines (the “ESMA Letter”), ESMA set out its view that it should be possible to dis-apply the requirements relating to the pay-out process under specific circumstances and that it should also be possible to apply lower thresholds whenever minimum quantitative thresholds are set for the pay-out requirements. In the absence of legislative amendment at European level, or clarification at member state level, the Manco has made its own assessment as to the application of the proportionality principle and in doing so has deemed it appropriate to have regard to ESMA’s views in the ESMA Letter regarding the circumstances in which the principle of proportionality may be relied upon.
5. Remuneration Committee
Taking into account its size, internal organisation and the nature, scope and complexity of its activities, the Firm has dis-applied the requirement to establish a remuneration committee.
In deciding to dis-apply this requirement, the Firm has taken into account the following considerations in relation to proportionality, insofar as they relate to the Firm and its activities and the funds under management. The Firm reviews the below considerations on an annual basis and acknowledges that as the Firm's activities expand and as it grows in size, that it may be appropriate to apply the requirement to establish a remuneration committee at a later date.
- Size:WWAMD made an assessment of the nature, scale and complexity of the Firm's business and determined that overall, its business activities are currently at a low level of risk when compared against other investment companies. The Firm has a risk framework in place to effectively manage the portfolio risks of the funds under management. The 4 funds under management collectively account for approximately € 1,556,400,629 in AUM. The Firm has 6 employees, (5 full time and 1 part-time) and 4 Directors. WWAMD considers that this level of activity and level of assets under management warrants a proportionate application of the remuneration rules.
- Internal Organisation:The Firm was incorporated in Ireland on April 30, 1999 as a private company with limited liability under the Companies Act 1963 to 2003. The Firm has converted to a Designated Activity Company (DAC) under Part 2 of the Companies Act, 2014 on 25 August 2016, which was notified to the Central Bank. The Firm will not be listed on any regulated market or exchange. The current number of employees and Directors (outlined in the preceding paragraph) is far below 50. The organisational structure is not complex with clear reporting lines in place.
- Nature, scope and complexity of the activities:WWAMD is currently appointed as manager to, 2 umbrella QIAIF and 2 umbrella UCITS. The Firm has not sought authorisation to carry on individual portfolio management services. The funds under management are domiciled in Ireland and the investment strategies of the funds are not complex, the funds under management predominantly have relatively low risk profiles, long-term investment objectives, low levels of levels of leverage and low-frequency trading.
6. Remuneration Report
Any breaches of the Remuneration policy will be reported to the Board. The Remuneration Report is issued annually by the Board, containing details of any breaches of the Firm’s remuneration policies and procedures and remedial action to be undertaken. If the Firm identifies that its remuneration policies and procedures are not being adhered to, the details will be brought to the Board’s attention by the Managing Director or by Compliance. Following a review of the issue, the Board shall determine the best course of action and ensure it is carried out.
Exceptional Reporting may occur if extreme remuneration issues are reported by Compliance to the Board on an exceptional basis where such issues should be considered, and these issues require addressing outside of a standard reporting procedure. This may involve the convening of specially scheduled board meeting in certain circumstances.
This document forms the written element of the remuneration policy for the Firm and should be read in conjunction with the Firm’s regulatory framework documentation and in particular the Firm's Programme of Activity. The Remuneration Policy reflects the Firm's objective for good corporate governance, including sustainability and ESG objectives, and:
- is consistent with and promotes sound and effective risk management and does not encourage risk-taking which is inconsistent with the risk profile, rules or constitutional documents of the Funds under management; and
- is consistent with the business strategies, objectives, values and interests of the Funds under management and includes measures to avoid conflicts of interest.
7. Roles and Responsibilities
The Board is responsible for ensuring that the Firm’s overall Remuneration Policy and framework is consistent with the strategic objectives of the Firm and takes account of risk management implications.
The Managing Director is responsible for implementation and effective operation of the Remuneration Policy and ensures that the Firm’s remuneration structures are compliant with requirements of this policy.
The Compliance and Risk functions are responsible for analysing how the Remuneration Policy affects the Firm’s compliance with legislation, regulations and internal policies and risk profile. The second line of defence is responsible for reporting all identified risk and issues of non-compliance to the management body.
The Internal Audit function carries out an independent review of the design, implementation and effects of the Remuneration policy on its risk profile and the way these effects are managed.
8. Risk Management
The Remuneration Policy is consistent with and promotes sound and effective risk management by:
- having a business model which by its nature does not promote excessive risk taking;
- defining performance goals and objectives for the funds under management which are aligned with the business; and
- ensuring that the fixed salary element of those involved in relevant functions reflects the market rate.
The Remuneration Policy (together with compliance herewith) will be subject to an annual internal review by the Managing Director and Compliance. Given the nature, scale and complexity of the Firm's activities, the Remuneration Policy will not be subject to an external, independent review. The review by Compliance will ensure that:
- The overall remuneration system operates as intended;
- The remuneration pay-outs are appropriate;
- The risk profile, long term objectives and goals of the UCITS and AIFs are adequately reflected; and
- The policy reflects best practice guidelines and regulatory requirements. Compliance and the Board will take appropriate measures to address any deficiencies identified in the Remuneration Policy.
10. Alignment with long term interests & sustainability
This Remuneration Policy focuses on sustaining a long-term value creation for shareholders and promoting sound and effective risk management through a stringent governance structure for setting goals and communicating these goals to employees and secondees. The policy ensures that remuneration is linked to the Firms strategies for sustainability and ESG and, where possible, variable remuneration reflects achievement of those targets. It incorporates measures to avoid conflicts of interest, including both financial and non-financial goals in performance and result assessments and making non-performance related remuneration the main remuneration component.
The Remuneration Policy reflects the Firm's alignment of the long-term interests of the Firm, its employees, secondees and clients. In addition, it ensures that:
- the Firm is able to attract, develop and retain high-performing and motivated employees / secondees in a competitive, international market;
- employees / secondees are offered a competitive remuneration package; and
- employees / secondees feel encouraged to create sustainable results in line with the long-term interests of the Company and its clients.