Crédit Mutuel Asset Management is a subsidiary of the Banque Fédérative du Crédit Mutuel (main shareholder).
Through this connection, it benefits from the resources and financial strength of Crédit Mutuel Alliance Federale, a cooperative group that is committed to upholding its values and ethics.
For reference, the remuneration policy applicable to investment fund managers is dictated by Directive 2014/91/EU of 23 July
2014 (the "UCITS V Directive") and Directive 2011/61/EU of 8 June 2011 ("AIFMD"), together with the texts transposing these directives.
The Board of Directors of the Caisse Fédérale de Crédit Mutuel is responsible for the approval of and compliance with the remuneration policy and oversees its implementation. The Board of Directors adopts and regularly reviews the general principles of the remuneration policy that are submitted to it by the remuneration committee.
The remuneration committee of the Caisse Fédérale de Crédit Mutuel performs an annual review of the principles of the remuneration policy and expresses an opinion on the proposals made by senior management, which formulates such proposals after referring with the risk and compliance department. It is composed of six directors, one of whom is an employee director. Additionally, the Company Secretary, Director of Human Resources and Chief Risk Officer of Crédit Mutuel Alliance Federale attend the committee's meetings.
The remuneration policy has been developed in such a way as to be in line with the business strategy, objectives, values and interests of the assets under management and with those of the investors, and incorporates measures to avoid conflicts of interest. Consequently, it does not encourage risk-taking that would be incompatible with the directives of the management company and the expectations of investors. Identified staff have specific responsibilities for risk and compliance, including the implementation of policies to integrate sustainability risks.
For the year 2021, Crédit Mutuel Asset Management is monitoring in particular the following aspects of its Remuneration Policy:
- Compliance with sectoral exclusion policies (coal, defence and security);
- Compliance with the exclusion of controversial.
Non-compliance with these obligations may result in a reduction in the allocation of individual variable remuneration.
The remuneration rules are documented, particularly with respect to the decision-making process, the determination of identified staff and the measures taken to avoid conflicts of interest. Remuneration is based on two key criteria: the performance of the fund(s) managed by the member of staff and the individual contribution of that person to the company's operations.
Furthermore, Crédit Mutuel Asset Management's investment and risk-monitoring processes are governed by ad hoc committees. Investment Committees are in place for all the asset management teams. These committees meet at their own specific frequency in order to define the authorised asset allocations within the management framework. The leeway that they have to manage their investments is subject to first-level controls notably by their superiors, both in terms of investment and compliance with ratios. The risk control and permanent control and compliance departments monitor the positions taken and compliance with internal and regulatory procedures.
These closely-monitored procedures therefore ensure limited risk-taking by the managers. Furthermore,
Crédit Mutuel Asset Management does not take any speculative positions on its own account and,
should an error occur, shall order the immediate unwinding of the positions.
Crédit Mutuel Asset Management has applied two criteria to identify risk-takers:
- The roles and responsibilities of staff in order to determine the risk-takers at the level of the Management Company and at the level of the UCITS / AIFs under management,
- Remuneration, in order to pinpoint which members of staff should be considered as risk-takers based on their remuneration.
The following people fall into the category of "identified staff":
- the Chief Executive Officer, the Deputy Chief Executive Officers, the Head of Asset Management, the persons in charge of, respectively: the Asset Management divisions, Responsible and Sustainable Finance, the Legal and Finance department, the Sales department, the Risk department, Support functions, Human Resources and the Chief Compliance Officer (CCO)
- staff assigned to Crédit Mutuel Asset Management's collective investment management operations: the fund managers
Some identified staff of Crédit Mutuel Asset Management receive discretionary bonuses alongside the fixed component of their remuneration. Such bonuses are essentially paid to investment managers and members of senior management. In order to limit risk-taking, the manner in which discretionary remuneration is determined must make it possible to take performance and risk into account. In any event, risk management, ethical conduct and the interests of customers must prevail over financial return.
Crédit Mutuel Asset Management may decide not to grant discretionary bonuses if the circumstances warrant such a decision. In particular, such individual bonuses may be lowered, or even amount to zero, in certain circumstances, notably if the interests of customers have been affected or there has been a clear breach of the rules of ethics. A guaranteed bonus is an exception. It is granted only when a new member of staff is hired and is limited to the first year.
Discretionary bonuses are paid in March of the year following the current year when there is visibility on the current year. They are capped at an annual amount of €100,000 and are not spread out over time. Prior notification would be given to the Autorité des Marchés Financiers (AMF- French financial markets regulator) should the remuneration policy be revised to allow the payment of discretionary bonuses in excess of €100,000, in which case Crédit Mutuel Asset Management would introduce measures to ensure that the policy complies with the "UCITS V" and "AIFM" directives, notably by providing for the deferral of payment over a minimum period of three years.