NEW YORK — Citigroup Asset Management has revamped its investment staff's compensation package, effective Jan. 1.
Citigroup's revised compensation structure provides transparency and alignment within all investment teams and encourages a sense of franchise, said Brad Thomas, managing director of human resources.
Among the key components of what Mr. Thomas calls a more objective and uniform compensation formula are:
c Factoring in a percentage of the revenue of the investment professional's product, and one- and five-year performance rankings relative to benchmarks and respective peer groups — with a heavier emphasis on the five-year performance.
c One-third of an investment professional's annual incentive compensation, which was previously invested in Citigroup stock, will now be required to be invested in Citigroup Asset investment products as part of a redesigned long-term deferral plan. Half would be invested in the professional's own strategy and half in Citigroup's other investment approaches.
c Lastly, the uniform formula also maintains a small subjective component, which accounts for up to 15% of a compensation pool, where the chief investment officer can weigh issues such as cross-selling capabilities and long-term product initiatives.