Charles Stanley expects to reach an agreement with staff on a revised pay scheme for 2017 in a matter of weeks, says its chief executive, but the move will see some staff take pay cuts.
Chief executive Paul Abberley told Fund Strategy: “This is something we hadn’t looked at for many years, and when the new management team came in the balance between the legitimate interests of the investment managers on the one hand, but the shareholders on the other, did need looking at again.”
“We’re hoping to be able to settle our proposals in the next few weeks.”
Abberley said that some staff could see their remuneration drop, but said the impact would vary between individuals.
“They will see a difference, but it varies an awful lot between different teams,” he says.
He would not comment on the teams that would be impacted the most, instead saying compensation was a “sensitive” subject.
“We’d been trying to find a revised model with revised numbers going through it, which is really fine and balanced between the respective interests, and also ensuring customer delivery is protected,” adds Abberley.
The remuneration consultation has taken longer than originally anticipated, Charles Stanley confirmed in its full year results, released this morning.
For the full year Charles Stanley saw financial losses slow to £300,000, compared to losses of £6.1m in 2015.
The bulk of savings in the core business were achieved by reducing remuneration costs, down by £3.7m following a 7.2 per cent drop in headcount from 1,052 employees to 976.
Regarding remuneration in the investment management industry Abberley says it is hard to generalise about trends. “Many in the industry have looked at revising models but all in very idiosyncratic ways,” he says.
A report published by PwC in April found compensation for asset managers as a percentage of revenues would fall to 35 per cent by 2020, from a high of 45 per cent.