Case Study – Annual Bonus Plan, Retail Fund Management


Following internal discussions on the introduction of a new incentive remuneration policy for their retail fund managers, advise the Board on the structure of and the key performance indicators for a new annual bonus plan including stock/fund deferral/stock option element.


  • using existing market knowledge, provide advice on the design features of the annual bonus plan for star and other fund managers, focusing on the key performance indicators
  • using market based data, provide advice on quantum of bonus payable, as a percentage of salary for each grade, at different levels of performance
  • advise on concept and tax implications of deferral, including a mechanism enabling managers to choose the amount of the deferral element and the deferral vehicle e.g. parent company stock or stock options, own fund or basket of funds, or cash
  • prepare financial models to determine aggregate quantum of payout under the plan under various “what if” scenarios
  • prepare detailed plan specification, including details on treatment of leavers and joiners
  • oversee implementation.