GAM has waived bonuses for its senior leadership following a torrid year for the Swiss asset manager which is struggling to move on from a high-profile scandal involving a former star portfolio manager.
GAM’s management board, which shared a bonus pool of SFr5.6m last year, will receive no bonus for 2019, while the company’s new chief executive, Peter Sanderson, will forgo a one-off SFr250,000 cash award in recognition of the group’s financial performance.
The Zurich-based fund manager reported a 92 per cent fall in pre-tax profits after investors pulled a net SFr11.1bn from its funds last year, shrinking its assets under management. It proposed no dividend for the year.
GAM had already indicated that its profits would be materially lower for 2019, the first full-year period since the group dismissed London-based investment director Tim Haywood for gross misconduct and liquidated his absolute return bond funds.
Staff at GAM, which has suffered an 80 per cent share price fall during the past two years, are bracing for job cuts as the group overhauls its operating model under new chief Mr Sanderson, who on Thursday pledged to achieve SFr80m of cost savings by 2021.
Mr Sanderson said GAM would build long-term shareholder value by implementing “a more efficient ‘One GAM’ approach [and] taking full advantage of technology to deliver for our clients”. The company did not disclose how many jobs were at risk.
GAM also announced it would shrink its management board from seven members to four, comprising Mr Sanderson, chief financial officer Richard McNamara, chief risk officer Elmar Zumbuehl and chief operating officer Steve Rafferty.
The three departing members of the management board — head of sales Tim Rainsford, general counsel Rachel Wheeler and private fund labelling head Martin Jufer — will continue to hold key senior roles at GAM, the company said.
Former chairman Hugh Scott-Barrett will not stand for re-election to GAM’s board of directors at its upcoming annual general meeting, with Thomas Schneider, current chairman of Basellandschaftliche Kantonalbank, put forward to take his place.
Assets under management at GAM remained stable at SFr132.7bn last year, but a significant shift occurred from the company’s higher-margin actively managed funds business to its private labelling division, which provides services and administration for other, smaller fund managers who lack the scale to do this themselves.