Stonehage Investment Partners LLP – UK Remuneration Policy

Introduction
The UK Financial Services Authority (FSA) has recently amended the Prudential Sourcebook for Banks, Building Societies and Investment Firms (BIPRU) to include a requirement for regulated firms to disclose their approach to linking remuneration to risk (the ‘Remuneration Code’). Under this Remuneration Code, Stonehage Investment Partners LLP (SIP) is classified as a Tier Four firm, which means that some of the technical requirements of the Code are not applicable.

SIP has adopted a Remuneration Policy which addresses potential conflicts of interest and ensures that senior management are not rewarded for taking inappropriate levels of risk. SIP is satisfied that its Remuneration Policy is appropriate to its size, internal organisation and the nature, scope and complexity of its activities.

The Decision Making Process
SIP’s Remuneration Policy is approved and overseen by the Stonehage Group Remuneration Committee (RemCo), the membership of which comprises Group non-executive directors only. SIP staff are eligible to participate in the Stonehage Group Bonus Scheme. This Scheme is discretionary and is approved and overseen by the RemCo; the aggregate compensation pool is based upon a predetermined percentage of adjusted Group profits, and the allocations to SIP would be subject to scaling back if SIP Regulatory Capital was at risk of deficit. In addition, individual bonus awards above a certain monetary value are subject to prior approval by the RemCo.

The link between pay and performance
Base salaries are benchmarked to market rates. The value of any discretionary bonus awarded is based upon a combination of Group profits/contribution to Group profits by SIP, and individual performance. Performance is reviewed semi-annually against a number of factors including key performance indicators, reduction of risk, quality of client offering and people development.

Variable Compensation
In the 2010/2011 financial year, all bonuses to SIP staff were paid in cash, less tax and national insurance deductions.

Quantitative Remuneration Data
SIP has assessed its staff and concludes that six employees qualify as Code Staff, as defined by the FSA. The aggregate remuneration of Code Staff for the financial year ended 31 March 2011 was £1,166,132 which includes both fixed and variable elements of remuneration.

Stonehage Investment Partners LLP (SIP) UK Stewardship Code

This statement sets out how SIP applies the principles of the UK Stewardship Code

The Financial Reporting Council ('FRC') issued the UK Stewardship Code ("the Code") in July 2010. The purpose of the Code is to enhance the quality of engagement between institutional investors and companies to help improve long term returns to shareholders and the efficient exercise of governance responsibilities. The Code is addressed in the first instance to firms who manage assets on behalf of institutional shareholders such as pension funds, insurance companies, investment trusts and other collective investment vehicles.

SIP is an investment adviser and manager, whose clients are categorised as either retail or professional clients in accordance with the FSA rules. The FSA has stated that all firms that manage investments for professional clients should produce a statement of commitment to the Stewardship Code or explain why it is not appropriate.

The purpose of this document is to describe our approach to stewardship responsibilities for each of the seven principles of the Code.

Principle 1
Institutional investors should publicly disclose their policy on how they will discharge their stewardship responsibilities

We fully support the principle of disclosure of this nature and seek to continue to serve the needs of our clients worldwide and meet their investment and client service expectations by managing, and advising upon, their assets to the highest possible standard.

Our stewardship activities extend to the review of potential investee companies' corporate governance at the investment selection stage where we assess management track record, credibility and attitude toward shareholders' interests. Where our investment is Material (defined below) we undertake an additional governance assessment which includes a review of committee structure, adherence to the UK Corporate Governance Code and the extent of independent challenge to the board.

A Material holding is a holding which meets or exceeds:

• 0.75% of the market capitalization of a 'large cap' company (a company is considered to be 'large cap' if it has a market capitalisation in excess of £5 billion); or
• 2.5% of the market capitalization of a 'small cap' company (less than £5 billion)

As part of our stewardship activities we also review of a broad range of risk controls which includes a macroeconomic assessment of sectors followed by in-depth fundamental analysis using qualitative and quantitative factors, such as valuations, competitive analysis and, where possible, management meetings.

We monitor our investee companies by reviewing their outputs such as company earnings reports, accounts, webcasts and road shows. We also actively seek views from independent sources. We retain records of initial and ongoing monitoring undertaken.

Whilst the bulk of our monitoring focuses on volatility and performance, it is our view that quantitative information of this nature provides an indirect measure of the quality and vision of the investee company’s corporate governance.

Principle 2
Institutional investors should have a robust policy on managing conflicts of interest in relation to stewardship and this policy should be publicly disclosed.

Occasions may arise where SIP has a material conflict of interest with respect to a matter to be voted. A material conflict of interest may exist, for example, if the Firm has a very significant business relationship with either the company whose stock is being voted, the person soliciting the proxy or a third party that has a material interest in the outcome of the proxy vote.

An Executive Director of SIP is responsible for identifying potential conflicts of interest and bringing them to the attention of the Firm’s Compliance Officer. The Compliance Officer and senior management are then jointly responsible for evaluating the materiality of any conflicts and how they should be addressed.

When a conflict of interest is identified, SIP may (1) vote the proxies in accordance with what it considers to be its clients' best interests; (2) refrain from voting, or (3) take other action appropriate under the circumstances.

Principle 3
Institutional investors should monitor their investee companies.

Our approach to monitoring our investee companies is set out under Principle 1.

Principle 4
Institutional investors should establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value.

SIP will intervene, when considered necessary, if it has a specific concern about the company’s strategy or performance. The circumstances and method of intervention will vary depending on the specific matters arising and whether the holding is Material (defined above). SIP also has the option of selling out or reducing a shareholding if it feels this would be in the best interests of our clients.

Principle 5
Institutional investors should be willing to act collectively with other investors where appropriate.

Whilst it is our preferred approach to deal with investee companies directly, where this does not achieve a satisfactory outcome consideration will be made to collective engagement with other investors when it is in our clients’ best interests. When doing this we would pay due regard to our policies on handling insider information.

Principle 6
Institutional investors should have a clear policy on voting and disclosure of voting activity.

Our approach to voting and escalation of concerns to senior management is driven by our level of influence over our investee companies which we view as proportional to our holding against market capitalisation, and so is not in complete compliance with all aspects of the Code.

The Code recommends that firms should seek to vote all shares. However it is our approach to only vote shares in companies where we have a Material holding, or in response to specific client requests.

In such cases, we will endeavour to support actions that help to promote within the underlying companies good corporate governance, fair treatment of shareholders/our clients, Board of Directors' responsibilities and transparency, and vote against or abstain from votes that are deemed not to support these aims.

Principle 7
Institutional investors should report periodically on their stewardship and voting activities.

SIP reports to clients, on request, details of any voting undertaken on their behalf.

The Stonehage Charitable Trust is the main expression of our corporate responsibility to give back to the communities we serve.

Our mission is to create a tangible legacy reflecting this commitment, primarily in the fields of education, health and social development where it is most desperately needed. We also promote excellence in the arts and sponsor other initiatives reflecting the values of the Stonehage Group.

Strong leadership and sound governance are recognised in the projects we support. We see innovation, local integration, leverage and empowerment potential as key drivers of social change.

Through the Stonehage Charitable Trust donors are able to gather around themes of common interest, share experience and co-invest. We partner with clients and colleagues alike to help those in need and assist others to realise their full potential.

Please contact Tanja Jegger in our Zürich office on:
T +41 44 217 9600

For more specific information please click here to download the brochure

UK and International:

Cubitt Consulting Limited
Simon Brocklebank-Fowler
Managing Partner
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Dr. Abby Munson
Director
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+44 (0) 20 7367 5100

Stonehage was established in 1976 to administer trusts, companies and other structures designed for client families.

Through our Family Office, the heart of our operations, families have access to the trusted advice and thorough implementation they need to achieve their goals and meet the challenges they face.

From a handful of initial recommendations, word soon spread and other families requiring similar services around the world approached Stonehage. As our business grew we rapidly acquired a reputation as a leading provider of international fiduciary services.

The business has evolved over the years and our capability has broadened. Today, we take a unique multi-disciplinary approach to wealth management designed to meet the complex needs of all the international families we serve.

Disclaimer

Who may access this website
The information and services on this website is directed at residents of Jersey, the countries of the European Union, South Africa and those countries where companies in the Stonehage Group may lawfully conduct business.  This site is not aimed at any other country. The contents of this site has been approved for Jersey by  Stonehage Trust Holdings (Jersey) Limited which is regulated by the Jersey Financial Services Commission, for countries of the European Union by Stonehage Investment Partners LLP, FSA authorised and regulated for South Africa by Stonehage Financial Services (Proprietary)  Limited which is a South African licensed Financial Services Provider. 

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While we have taken care to ensure that the content on this website is accurate and that you suffer no loss or damage because of your use of this website, this website and the services accessible on or via this website are provided "as is" and your use of this website and the online services is at your own risk.

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We and our affiliates, shareholders, agents, consultants or employees are not liable for any damages whatsoever relating to your use of this website or the online services or the information contained on this website or your inability to use this website or the online services. This includes, without limitation, any direct, indirect, special, incidental, consequential or punitive damages, whether arising out of contract, statute, derelict or otherwise and regardless of whether we were expressly advised of the possibility of such loss or damage.

Without derogating from the generality of the above, we will not be liable for:

• any interruption, malfunction, downtime or other failure of the website or online services, our system, databases or any of its components, for whatever reason;
• any loss or damage arising from your orders, investment decisions, purchases or disposal of goods and services, including financial instrument(s) or currency, from third parties, based on the information provided on this website;
• any loss or damage with regard to customer data or other data directly or indirectly caused by malfunction of our system, third party systems, power failures, unlawful access to or theft of data, computer viruses or destructive code on our system or third party systems; programming defects or negligence on our part;
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• any event over which we have no direct control.

We are continually looking for smart, motivated professionals to complement our team. The entrepreneurial environment at Stonehage is dynamic and challenging, and each individual is encouraged to achieve their maximum potential supported by their colleagues.

If you believe you share our values, please send your CV to us at .(JavaScript must be enabled to view this email address)

If you have any questions about Stonehage please don't hesitate to contact us:

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We always welcome your response.

Stonehage has developed a unique character; a way of doing business that is secure, traditional and personal but also highly entrepreneurial. We always seek opportunities to enhance and add to the range of solutions available to our clients.

Our staff, drawn from a wide range of professional backgrounds, brings a unique combination of expertise and experience. This valuable intellectual resource gives welcome reassurance to all our clients. We are proud of the fact that people find it rewarding to work for Stonehage and that our staff turnover is extremely low.

This provides our clients with a familiar atmosphere and continuity in their dealings with us. Our culture is a caring one, supporting clients through the difficult as well as the good times. Whatever the circumstances, we are there to service our clients' changing needs in a rapidly changing world, always there to provide solutions.

We believe direct communication is the key to successful management. That is why the wealth management of every client is coordinated by a dedicated relationship director in our Private Client division. He or she will take primary responsibility for getting to know you as a client, working with you to define your objectives, discussing all the available options and developing an agreed approach.

Whatever your requirements, we will look after you.

As well as expert advice on investment, taxation and legal structures we help with long-term strategic issues, succession planning, family governance, reporting and communications. We also administer trusts, companies and other investment vehicles.

We know from experience the value of time and effort spent at the beginning of a relationship, not only to ensure the right solutions, but also to understand

the type of service you are looking for. So we always take time to get it right from the start.

Stonehage is a leading independent Multi Family Office offering wealth management and advisory services to an international clientele. Stonehage works with clients to protect and enhance their wealth across jurisdictions and generations.

We know our clients well. And they know us. Our interests are always closely aligned with those of our clients and we take great pride in the depth of the advisory relationships that we have built with our clients over the years.

Never intrusive, we nonetheless maintain careful watch over the families we look after, always making certain they are best advised and best served. Our vigilance is backed by knowledge, experience and sound financial judgement.

The thoroughness of our approach has won us many friends. Assets under administration continue to grow strongly and our offices around the world are thriving, with new colleagues joining us on a regular basis.

Stonehage is genuinely independent, being owned by management, with dynamic internal resources serving the interests of our clients. We do consult externally with advisers in specialist fields, but we never outsource responsibility.

Stonehage is a leading independent Multi Family Office offering wealth management and advisory services to an international clientele. Stonehage works with clients to protect and enhance their wealth across jurisdictions and generations.

We know our clients well. And they know us. Our interests are always closely aligned with those of our clients and we take great pride in the depth of the advisory relationships that we have built with our clients over the years.