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Please describe your compensation structure for investment professionals. The firm’s compensation structure for Analysts and Investment Committee members is designed to attract and retain highly capable value investors, and to incentivize their long-term performance and contribution to the investment process. The overall program includes: 1. 2. 3. 4. 5. Competitive base salaries and benefits Annual discretionary bonus plan Participation in profit sharing and 401(k) plans Potential for participation in the firm’s phantom equity program Potential for participation in the firm’s Limited Partnership In regard to base salary and bonus compensation levels, the firm annually reviews industry compensation practices for peer organizations to help ensure that Analysts and Investment Committee members are competitively compensated. The annual discretionary bonus plan is a meaningful component of total compensation for these individuals. Bonus amounts are based on performance, experience, and tenure—depending on these factors, bonuses typically range anywhere from 0.5x to 2.0x base salary, or possibly more in rare instances. Individual performance is closely examined when making decisions on bonuses and changes in base salary, as are the firm’s overall business results. Each Analyst and Investment Committee member receives an extensive 360-degree style review that incorporates input from up to 25 peers and managers at the firm and includes feedback on the following: The overall quality of analysis and research reports The productivity and timeliness of research Contributions to Committee discussions of both company research and portfolio construction Adherence to our philosophy and value principles Brandes views compensation differently than many others asset managers do. Since our goal is to incentivize Analysts to produce consistent high-quality company research that is unbiased and objective, compensation is not tied directly to asset levels or the number of covered companies in the portfolio. Many of our peers evaluate analysts based on the performance of recommendations or “paper portfolios” over specific time periods. Brandes does not, because this approach can create misaligned incentives. For example, with a paper portfolio approach, Analysts who are experiencing underperformance towards the end of the specified time period could be motivated to recommend riskier positions in order to “swing for the fences.” Alternatively, Analysts outperforming could be incentivized to avoid taking more active positions and simply align recommendations with the benchmark in order to “lock in gains.” Our firm is purpose built for value and is designed to protect our investment philosophy and process while mitigating/eliminating the personal bias of any one individual. We believe that our compensation structure for Analysts and Investment Committee members is an important contributor to our style consistency and style purity. Lastly, a majority of the firm’s equity Investment Committee members are also Limited Partners of the firm’s parent company. As equity owners, their compensation is tied directly to the performance of the firm, which is closely connected with the performance of our individual investment strategies. This mechanism links our Investment Committee members’ compensation to investment performance. We have purposefully designed our compensation structure to align our interests with our clients’ interests as briefly summarized below: We promote long-term thinking, which is critical to the successful implementation of a value process We encourage rigorous research and appropriate risk-taking, while reducing incentives to “game the system” as well as minimizing potential fear in bringing compelling value ideas to the Investment Committees, all necessary for a successful active management strategy Shared ownership by many of our Investment Committee members means they are directly impacted by the performance of all of the firm’s investment strategies, providing a strong incentive to work toward delivering excellent results for our clients in all strategies