Compensation Policy Report2009 Annual Report on Compensation Policy and Practices for Financial Market Professionals As leader in the financial services industry operating in the global marketplace, Newedge needs to be responsive to government and regulatory guidelines on compensation practices. Guidelines being issued by the G20, local government and various regulators, all calling for sound compensation practices, echo the need for good corporate governance and good corporate behaviour for our sales and support employees.
Most importantly, beside the G20 recommendations on compensation, Newedge must operate competitively but also remain profitable. Newedge intends to remain competitive, recognizing that our employees are our most valuable asset. As an institution, we must be able to retain talent and recruit new talent, whilst demonstrating a corporate awareness of governance issues.
Newedge Group SA is subject to the new 97-02 CRBF regulation on compensation of financial market professionals. Newedge Group SA is a member of the French broker-dealers association (Association Française des Marchés Financiers - AMAFI) and has adhered to the AMAFI operating rules relating to compensation of market professionals.
Newedge Group SA (its branches and affiliates together “Newedge”) are committed to:
Compensation Governance: Subject to the general oversight and authority of the board of directors of Newedge Group SA (the “Board”), the Remuneration Committee (“CoRem”) is responsible for (i) drawing up and submitting to the Board the criteria for determining the compensation of the CEO, Deputy CEO and the other Executive Committee Members, and (ii) advising the Board on the compensation policy of the Group. The CoRem includes representatives of Société Genérale and Crédit Agricole CIB. In 2009, the CoRem debated and validated Newedge efforts on progressing the compensation reform and implementing the new 97-02 CRBF regulation within all Newedge entities. In 2009, the Board approved the adoption of these AMAFI rules relating to compensation of market professionals.
Characteristics for front office population: A review of the risk horizon for the various categories of sales activities was performed in 2009 by the Newedge Risk Department. The review was undertaken in order to define which front office activities of Newedge may have a significant impact on the risk exposure of the firm, and over what time horizon.
Characteristics for Executive Committee members: Discretionary bonuses for members of the Executive Committee are funded from the same global bonus pool as for control and support functions. Executive Committee members’ compensation arrangements, including annual bonus awards, are subject to review/approval of the CoRem. In 2009, Newedge introduced a mandatory deferral plan for members of the Executive Committee which is subject to the performance conditions of Newedge.
Policy concerning deferral of compensation and guaranteed compensation: Deferred compensation and deferred earnings plans have been implemented or created for introduction in 2010 for all staff, subject to existing employment terms. With respect to front office staff, Newedge’s deferral plans are applicable to all forms of variable compensation, whether discretionary bonuses (deferral) or formula-based commission (deferred earning opportunity). This means that a portion of variable compensation may only be vested or may only be earned when and as certain conditions are satisfied, and thus a portion of potential compensation may be subject to forfeiture in certain cases (e.g., firm performance, losses, material breach of employment terms, departure from the firm). Guarantees are used on a very limited basis, and are limited to exceptional new hire situations for a maximum of one year.
Download the report on financial market professionals 2009 compensation. |