Charles Stanley has altered the way its investment managers are paid as it looks to align staff interests more with shareholders.
According to an update published today (24 November), the firm has agreed on a new remuneration scheme which changes the way both employed and self-employed investment managers are paid, and aims to recognise the differences between the two.
New contracts mean pay packets are based on profit contribution as opposed to revenue, which the firm claimed will encourage behaviour that drives better profits for clients.
While the new contracts are less attractive than previous because the ratio of pay is lower, it means investment managers can increase their total compensation depending on how much profit they make.
Paul Abberley, chief executive of Charles Stanley, said the conclusion of this agreement, which has been undergoing a consultation for two years, marks a “major milestone” in the continued turnaround of the group.
Around 90 per cent of the investment managers have agreed to the new structure, and Mr Abberley said it has been important to work collaboratively with them to “create a solution that works in the best interests of us all”.
“I would also like to than stakeholders for their patience during this important time.”
This comes as the firm reported an 80 per cent jump in pre-tax profits in the six months ending 30 September, hitting £3.6m from the £2m posted in the six months to the end of March.
This is a marked turnaround after the company posted a loss in the last financial year.
The firm’s funds under management also increased, rising by 13 per cent to £23bn from the £20bn posted over the same period last year.
Commenting on the conclusion of the remuneration consultation, Mr Abberley said: “This will enable all our staff to come together to work toward delivering sustainable profits, with a focus on enhancing the customer experience, growing revenues and improving operating efficiencies."
The group has also announced that its executive director Mike Lilwall has decided to step down from the board, effective from close of business yesterday (23 November) in order to focus on private client investment management.
