This document is designed to set the parameters for the remuneration policy of Third Platform Services Limited (“TPS”) and to ensure a consistency of approach in recruiting and retaining employees who will be engaged, appraised, trained and motivated to play a key part in TPS’s culture of treating customers fairly.
This Policy statement aims to:
- Ensure that TPS’s remuneration policy is in line with its business strategy, objectives, values and long-term interests
- Ensure that a consistent approach is taken to attract, develop, retain and reward employees for contributing to TPS’s success, whilst maintaining financial stability and robust and effective risk management
- Act as an aide-memoire for the relevant points to be covered
- Maintain the relevance of the policy by ensuring that reviews are carried out by the Board at predetermined frequencies
1.2. Remuneration Code Principles
TPS is aware of the FCA’s Remuneration Code incorporating 12 principles and this policy sets out how it will act in accordance with them.
TPS has maintained a record of all employees to whom the Remuneration Code applies and has taken steps to ensure that all employees to whom the Code applies understand the implications of their status and the potential for any remuneration that does not comply with the Code to be rendered void and recoverable by TPS.
1.3. Related Documents/Policies
- Governance and Risk Disclosure
- Compliance Manual
- Conflicts of Interest Policy
- Personal Account Dealing Policy
- Treating Customers Fairly Policy
- Contracts of Employment
2. Risk Appetite and Tolerance
TPS has assessed its risk appetite and this is documented in the Governance and Risk Disclosure document which is available to all employees and Customers via the website. Operating within the scope of the disclosed risk appetite is an absolute pre-requisite to the award of any remuneration. Non-compliance with, or actions contrary to, the stated risk appetite will not be rewarded.
Operating within the stated risk appetite is realised in practice through the firm’s Internal Capital Adequacy Assessment Process (“ICAAP”). The ICAAP is approved annually by TPS’s Board of Directors.
Included in the ICAAP, and considered in the awarding of remuneration packages are:
- Key risk indicators (“KRIs”) and tolerances set by the Board of Directors and assigned to business units and ‘Identified Staff’. KRIs are defined and measured annually in employee annual appraisals and reviewed on a six-monthly basis;
- Clear risk objectives and the ongoing monitoring and supervision of performance for every employee; and
- Compliance by all employees to the practices set out in the compliance manual and its associated policies and procedures.
3. Conflicts of Interest
TPS ensures that this remuneration policy includes measures to avoid conflicts of interests. To demonstrate this, the remuneration packages received by employees to whom the Remuneration Code applies are primarily reflective of that individual’s professional experience and level of responsibility within the firm.
This policy recognises that conflicts can arise where employees are responsible for determining the remuneration of their own business areas, however the scale of the firm means that this may be unavoidable. The CEO will be responsible for determining all remuneration packages across the company and conflicts will be managed by adhering to a standard process for defining remuneration across all relevant roles.
4. Policy Statement
This policy applies to senior management and the categories of staff who would be considered to be risk takers, those engaged in control functions, those who receive remuneration packages that are aligned with those received by senior management and those whose professional activities have a material scope on TPS’s risk profile.
4.1.1. Staff Categories and business lines
The current size of TPS means that employees who hold control functions are not always independent from the business units that they oversee however they have the appropriate authority to take action where necessary to address any potential or actual conflicts that may arise from this. TPS has ensured that remuneration packages for control function employees are adequate so that experienced staff are attracted and retained and that the package is dependent on the achievement of the firm’s objectives and the objectives linked to the business areas that they control.
4.1.2. Basic Salary
Basic salary compensation is generally based upon the employee’s professional experience and organisational responsibility as set out by their job description and terms of employment. Other measures used are individual performance and expertise in their specific area. The prevailing market rate for each role will be considered when recruiting employees to whom the Remuneration Code applies.
All salary bandings are recommended and approved by the CEO.
4.1.3. Variable Compensation
A small number of employees are eligible to receive variable remuneration as a portion of their overall pay. These items are designed to reward performance leading to long-term sustained value creation for the Group and are determined annually by the Board.
TPS currently offers additional incentives in the form of pension contributions and private health care.
4.1.5. Pension Policy
The terms of the pension scheme offered to employees by the firm is in line with the firm’s business strategy, objectives, values and long-term interests. TPS has taken its pensions obligation into consideration when calculating its ICAAP requirements.
All employees are encouraged to invest in a pension for their future retirement.
4.1.6. Remuneration and Capital
TPS has implemented remuneration arrangements that are sufficiently flexible to allow for necessary resources being directed towards strengthening the capital base if required.
4.1.7. Personal Investment Strategies
Employees are made aware through this policy that they may not use personal hedging strategies or liability related contracts of insurance to undermine the risk alignment effects embedded into the firm’s remuneration arrangements.
4.1.8. Early Termination
The firm has reviewed all existing contracts to ensure that any early termination payments will be payable only where they are consistent with the Remuneration Code. This policy ensures that any payments made reflect performance achieved over time and are designed in a way that does not reward failure or misconduct.
4.2. Authorities and Ownership
This policy is owned by the CEO and is distributed to all staff within the firm. The CEO is responsible for the preparation of any decisions regarding remuneration and will take into account the long-term interests of shareholders, investors and other stakeholders as well as public interest where relevant.
4.3. Policy Development, approval and implementation process
The Board are responsible for ensuring the policy is periodically reviewed and properly implemented. The policy is communicated to Customers through the website as required.
4.4. Reporting breaches
The Remuneration Codes does not contain any particular notification requirements however, the FCA would expect to be informed where significant breaches of the Code occur and where any policies, procedures or practices would have a significant adverse impact on the firm’s reputation, services to clients or financial consequences to the firm or other firms.
4.5. Document Review Cycle
The firm’s Board will independently review the remuneration policy on an annual basis to ensure:
- The policy operates as intended, that remuneration pay-outs are appropriate, and that the risk profile, long term objectives and goals of the firm are adequately reflected; and
- The policy remains in line with the Financial Conduct Authority’s requirements, principals and standards including the continued application of proportionality under CRD IV.
[Last revised: 27-Aug-20]