The remuneration system established by the senior management applies to all employees and executives of d.i.i. Investment GmbH (hereinafter “the Company”). The remuneration policy is consistent with the Company's business strategy, and is meant to enhance the administration of the investment funds for the benefit of the investors while avoiding conflicts of interest. In particular, the remuneration system presupposes a sound and effective risk management system, and promotes it by ruling out incentives for entering into risks that are irreconcilable with the risk profile, the investment rules and the partnership agreement of the administrated AIF.
Overall Responsibility of the Senior Management for the Remuneration System
Part of the senior management's responsibility is to define the remuneration principles and to ensure their application. As a corporate management tool, the remuneration system focuses on achieving the objectives set forth in the business strategy. The senior management seeks to establish a robust and prudent remuneration policy and to avoid abusive circumvention of the same. The remuneration system is structured in such a way as to offer no incentives to executives or employees to enter into disproportionate risks. One of its integral components toward this end is a fair compensation in the form of an adequate fixed annual salary. The senior management will periodically, but at least once a year and as events may require, review the remuneration system (see the section “Periodic Reviews” below).
Integrating the Supervisory Function
In its role as supervisory body, the Supervisory Board will be brought in on the process of accepting, retaining and structuring the remuneration policy by the senior management. The Supervisory Board watches over the implementation of the remuneration policy and is briefed periodically, but at least once a year and as events may require. The Supervisory Board ensures within the framework of its supervisory function that the objectives of the remuneration policy are consistent with the regulatory requirements and with a sound business strategy of the company, including compliance with general corporate governance principles, a fund administration in the best interest of the investors and commitment to the integrity of the market, and that conflicts of interest as a result of the remuneration policy are avoided. Moreover, the Supervisory Board ensures that the Company's controlling functions (Risk Controlling, Compliance, Internal Audits) are properly integrated. The remuneration of the senior executives is periodically reviewed by the Supervisory Board.
The ESMA Remuneration Guidelines mandate that those of the Company's employees who are so-called identified staff be named. In addition to senior executives, these include employees whose job exerts a major influence on the risk profile of the Company and the investment assets under its management (“risk bearers”) and employees with control functions. Also considered to be identified staff are employees who are paid an overall remuneration, which puts them in the same income bracket as senior executives and risk bearers. Definitive for the identification of relevant employees, aside from their position within the corporate hierarchy, is any activity in an area relevant for risk-bearers or in a control unit as well as any influence employees may have on the risk profile of the investment funds and of the Company. It should be remembered in this context that final in-house decisions regarding the acquisition or disposal of assets on behalf of the pools of investment assets as well as their management should be made solely by senior executives. On their own, other staff have no material impact on the Company's risk profile. Rather, staff of this kind may only prepare the relevant decisions by the senior management. Included among the identified staff are nonetheless those employees who, while not authorised to make decisions on their own, can have a material impact on the decision-making process. For the same reason, meaning their potentially material impact, employees of controlling units should also be identified. Application of these criteria results in the identification of the following senior staff:
• Head of Product Design
• Head of Property Acquisitions, Fond Management, Property Portfolio Management
• Head of Risk Management and Risk Controlling
• Head of Sales
There are no other employed designated as identified staff by virtue of their functional position.
The remuneration system presupposes a sound and effective risk management system, and promotes it by ruling out incentives for entering into risks that are irreconcilable with the risk profile, the investment rules and the partnership agreement of the administrated AIF. The idea is therefore to align the remuneration policy with the Company's business model, its sustainable performance, and its risk structure. Accordingly, the following guidance applies to the remuneration of employees:
Fixed Annual Salery
The system of fixed annual salaries depends on the status of a given position or of the function exercised in line with market conditions. Relevant for the remuneration are the requirements for the qualification, and employee skills, among other factors. The remuneration rules are structured in such a manner that employees become in now way dependent on a variable remuneration, and this is particularly true for the fixed annual salary. The Company signs no work or employment contracts that include obligations to pay compensation to employees leaving the Company.
The Company's remuneration system exclusively prescribes fixed annual salaries for all of its employees. The Company does not practice variable remuneration. Neither does the Company offer any guaranteed variable remuneration to its employees. In connection with the early termination of contracts, the Company pays no rewards for failure.
The Company is not organised in a way that offers salary-related benefits and options to its employees. The Company does not grant private pension plan benefits. Only selected employees, specifically the senior executives and certain employees in senior roles are granted the use of company cars. This option does not extend to all of the Company's employees.
Remuneration of Employees in Control Functions
Employees and executives in the following business units are considered employees in control functions:
• Risk Management and Risk Controlling
• Internal Audits
To avoid conflicts of interest, the remuneration of employees in controlling function is structured so as to be independent of the performance of the pool of investment assets. If variable remunerations were to be introduced at some point in the future, personal performance targets would have to be agreed for the respective employees in the relevant functions.
Die Gesellschaft wird keinen eigenen Vergütungsausschuss einrichten. Nach den ESMA-Vergütungsleitlinien ist die Einrichtung eines Vergütungsausschusses nicht erforderlich bei Gesellschaften, bei denen der Wert des Portfolios der von ihnen verwalteten AIF unter 1,25 Milliarden Euro liegt und die Gesellschaft weniger als 50 Mitarbeiter beschäftigt.
The senior management will periodically, but at least once a year and as events may require, review the remuneration system. The Supervisory Board will be brought in on the review process. The review is to focus on the adequacy of the remuneration system against the background of the size and internal organisation of the Company and on the type, scope and complexity of its business activities. Subject to review is specifically the need to set up a remuneration committee. Other, event-related aspects may also be considered, such as the impact of the remuneration policy (e. g. fixed annual salary) on employee churn and motivation, and evidence of attempts to bypass the remuneration guidance. If, from the perspective of the senior management and the supervisory board, the remuneration principles need to be revised, the revision will also cover the risk management function, the compliance function and the internal audit system. While e. g. the influence of the risk profile of the AIFM plays a role for the Risk Management, and while e. g. the influence on the adherence to statutory and internal requirements matters to Compliance, the Internal Audits unit applies the experiences it gains from its regular, independent auditing to facilitate the implementation and boost the effectiveness of the remuneration policy.