Hedge fund firm Man Group caps executive bonuses

LONDON, March 18 Tue Mar 19, 2013 12:23am IST

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LONDON, March 18 (Reuters) - Man Group is to cap future cash bonuses for its senior executives, the hedge fund manager said in its 2012 annual report published on Monday.

Man said that short-term annual cash bonuses, which were previously uncapped, would be limited to 250 percent of salary for executive directors after discussions with shareholders.

The firm is also paying no bonuses to top executives for 2012.

The change in policy on bonuses comes under new chief executive Emmanuel Roman, who took up his job last month and is trying to turn around the fund firm.

Man has suffered from poor performance from its flagship computer-driven fund AHL and has experienced net customer outflows in every quarter for the last four years, apart from two quarters during the first half of 2011. Its shares have fallen by two-thirds since the start of 2011.

It also follows political pressure to cap bonuses for senior executives in the finance industry after the excesses of the financial crisis.

After reaching a deal at the end of last month to cap bank bonuses at the same size as base salaries, or twice basic if backed by shareholders, some politicians are now turning their attentions to other areas of finance, including hedge funds.

Last year Man came in for criticism from small shareholders over its pay, particularly former CEO Peter Clarke's nearly $7 million pay package.

The annual report showed Roman was paid just over $1 million for 2012, while Clarke received just under $1 million.

Man also said that 80 percent of long-term deferred bonuses would be determined by financial metrics such as net client flows and investment performance. Under the plans, executives could forfeit bonuses due to misconduct or misstatement of figures.

"The board has also recognised that the current remuneration structure had become overly complex with a resulting lack of transparency to shareholders and reduced clarity to executives," the report said.

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