Gam has announced it will be scrapping bonuses for its top executives and its dividend for 2019 as chief executive CEO Peter Sanderson (pictured) attempts to make the fund group “fit for the future”.
In its full year results for 2019 the Swiss manager said the group management board, which split a bonus pool of CHF 5.6m (£4.4m) last year, would receive no bonuses for the period and that Sanderson had chosen to forego a contractual fixed cash award worth CHF 250k (£198k) he was due to receive.
Profits at the firm plunged to CHF 10.5m (£8.3m) in 2019, down 90% from CHF 126.7m (£100.2m) the group took in 2018. As a result the board said it had decided to axe the dividend for the year.
The changes form part of Sanderson’s latest strategy overhaul for the beleaguered fund group which will see him focus on making the business more transparent and efficient and building on Gam’s existing strengths to attract and retain talent.
Blackrock vet Sanderson has had his work cut out for him since taking over as top boss in September. The firm has been struggling to repair its damaged reputation since the suspension of Tim Haywood in July 2018 and the liquidation of his £8.5bn absolute return bond fund range. Haywood’s sacking has wreaked havoc on the firm’s share price and prompted clients to pull their money out in droves.
In 2019, the first full 12-month period following Haywood’s suspension, assets under management in the investment arm were down to CHF 48.4 billion from CHF 56.1 billion.
Board members halved
The Swiss manager has halved the number of people on its board to “streamline decision making” and “provide a clearer allocation of responsibilities”.
Sanderson will continue to serve on the group management board alongside CFO Richard McNamara, chief risk officer Elmar Zumbuehl and COO Steve Rafferty. But four members including group head of sales and distribution Tim Rainsford and region head of continental Europe Martin Jufer have been ousted.
Thomas Schneider will stand for election as a new board member at the Swiss manager’s AGM on 30 April 2020. Schneider is currently chairman of the listed Swiss bank Basellandschaftliche Kantonalbank and has over 27 years of auditing experience at Ernst & Young. He will replace Hugh Scott Barrett who has decided not to stand for re-election.