The pressure exerted by RBR Capital hedge fund on the asset manager GAM leaves its first marks. The company’s remuneration policy will be reviewed.
Asset Manager GAM's CEO Alex Friedman is once again in the firing line of Zurich hedge fund RBR Capital over his performance and salary.
GAM and its CEO have now responded publicly to the RBR campaign for the first time. As GAM announced Tuesday, Friedman has requested that his bonus for the coming year be paid in the form of long-term restricted shares. In addition, the amount will be capped at no more than his fixed pay.
Friedman took home a total remuneration of some six million Swiss francs in 2016, some one million more than the previous year. This in the context of a miserable year for GAM, with high outflows of client money and a massive drop in profit.
Bigger Say on Pay
Board member and proposed chairman Hugh Scott-Barrett pledges to personally oversee a comprehensive review of the group’s compensation structures and policies.
The focus will be on the group management board individual and total compensation. Salary and bonuses will be monitored to ensure greater alignment with the long-term success of the business.
The review will also be conducted in consultation with shareholders, Scott-Barrett said.
Cold Feet?
This is a completely new tone coming from GAM. U.S. shareholder advisor ISS recently aligned itself with RBR Capital’s demands in several points. The second most powerful US proxy vote manager, Glass Lewis, also supports RBR’s demands.
In announcing its first concession, GAM appears to have cold feed ahead of its AGM. The asset manager has backing from its shareholder Silchester International Investors, which wants to support the proposed composition of the GAM board.
RBR has other ideas, proposing Kasia Robinski as chairperson, as well as putting forward two new names for the board – Rudolf Bohli and William Raynar.
Inflows in the First Quarter
A first-quarter report from GAM shows a 5 percent increase in managed assets in the group to 126.9 billion francs. The investment management area saw growth of 2 percent driven by positive investment performance, with net outflow of 100 million francs.
Overall net inflows were 2.8 billion, all of which came from the private labelling side.
GAM claims the results show its transformation is on track. Next, the asset manager wants to step up improvements by introducing further revamp measures.
