Hermes Group Remuneration Policy
The Company forms part of the Hermes Group. It is intended that the Company will apply the Hermes Group Remuneration Policy subject to the specific amendments outlined in Appendix 2.
Identified / Code staff
The AIF Regulations and the UCITS Regulations require the Company to identify the categories of staff whose professional activities have a material impact on the risk profiles of the Company or the Funds which it manages. The identified staff for the Company will be identified in accordance with the Hermes Group Remuneration Policy which will have regard to staff who may have a material impact on the risk profile of any Product managed by the Company.
The AIF Regulations and the UCITS Regulations require AIFMs or UCITS Management Companies that are significant in terms of their size or the size of the Funds they manage, their internal organisation and the nature, scope and complexity of their activities to establish a remuneration committee.
Having considered these criteria, the Company has determined to establish a remuneration committee. Membership of the Remuneration Committee is comprised by the Chairman of the Company, and other non-Executive Director(s) or Hermes Group representatives who are appointed from time to time. The Remuneration Committee and the Board agree the broad policy and framework for the remuneration of Code Staff.
Alignment with our approach to sustainability
Our philosophy is to reward individual contribution, as demonstrated by the delivery of long-term sustainable results that are aligned with our business strategy, values, behaviours and which serve the best interests of our clients and shareholders while enabling the business to grow to its potential. These values are reflected in the Company Pledge. Our reward strategy principles reinforce this approach, including linking remuneration to the values of the Company and to demonstration of corporate behaviours alongside investment, business and personal performance. Our focus on long term awards encourages employees to create a sustainable business, discouraging excessive or concentrated risk taking and avoids conflicts of interest.
The Board has delegated certain activities, as specified in its Business Plan, in respect of the portfolio management and risk management of the Funds which it manages, to HIML. In those circumstances the ESMA Guidelines require the Company to be satisfied that HIML is subject to regulatory requirements on remuneration that are equally as effective as those applicable under the AIFMD or UCITS Directive, as relevant. HIML is part of the Hermes Group and subject to the Hermes Group Remuneration Policy. The Company is satisfied, on advice of counsel, that HIML is subject to remuneration requirements which are equivalent to the AIFMD and UCITS remuneration requirements.
On an annual basis the Board will review the terms of this Remuneration Policy and assess whether its overall remuneration system operates as intended and is compliant with the obligations on remuneration policy as set out in the AIFMD and the UCITS Directive. The Remuneration Policy will be updated by the Board as and when required.
The Company will make such disclosure concerning remuneration as may be required by law or regulation, including to the Central Bank of Ireland (or its successor) through public disclosures on the firm’s website and in the financial reports of the Company and / or the Funds.
The effective date of this Policy is 1 March 2021.
List of Funds
- Federated Hermes Investment Funds plc and any sub-funds thereof.
- Federated Hermes Direct Lending Master Fund SCS, SICAV-SIF
- Federated Hermes European Direct Lending Master Fund SCS, SICAV-SIF
- Federated Hermes European Direct Lending Fund Master II S.C.A., SICAV-RAIF
AMENDMENTS TO THE HERMES GROUP REMUNERATION POLICY IN RESPECT OF THE COMPANY
The Hermes Group Remuneration Policy shall be deemed to adopted by the Company subject to the following amendments insofar as it relates to the Company.
- The following paragraph is inserted as the final paragraph under the heading “Purpose”.
“To the extent that this policy extends to Hermes Fund Management Ireland Limited (“HFM Ireland”) and its Code Staff, we confirm that we also believe this policy to be consistent with requirements of the ESMA Guidelines on sound remuneration policies under the AIFMD (ESMA/2013/232) (the “ESMA AIFMD Guidelines”) and the ESMA Guidelines on sound remuneration policies under the UCITS Directive (ESMA/2016/575) (the “ESMA UCITS Guidelines” and together with the ESMA AIFMD Guidelines, the “ESMA Guidelines”), as relevant. In the context of HFM Ireland Any reference hereunder to the “Code” shall be deemed to include the ESMA Guidelines.”
- The following paragraph is inserted as the final paragraph under the heading “Governance”.
“For the avoidance of doubt, RemCo shall not be constituted as a committee of the board of HFM Ireland which shall establish its own Remuneration Committee. References to the role and functions of RemCo shall otherwise apply equally to the HFM Ireland Remuneration Committee as the context admits.”
- The following paragraph is inserted as the final paragraph under the heading “Code Staff”.
“To the extent that the HFM Ireland Remuneration Committee identifies Code Staff within HFM Ireland, it shall update the board of HFM Ireland accordingly. The Head of Compliance of HFM Ireland shall maintain a record of all Code Staff. The board of HFM Ireland retains the authority to review or amend any determination or recommendation of the HFM Ireland Remuneration Committee (subject to any directors of the board of HFM Ireland who are Code Staff complying with relevant conflicts of interest requirements).”
- The following paragraph is inserted as the final paragraph under the heading “Personal Investment Strategies and Avoidance of SYSC 19”.
“In the context of HFM Ireland, the reference to SYSC 19 above shall be deemed to be a reference to Section XI.IV of the ESMA AIFMD Guidelines and to Section 12.4 of the ESMA UCITS Guidelines respectively.”
HERMES GROUP REMUNERATION POLICY