Remuneration principles and practices of LLB Asset Management AG

LLB Asset Management AG (ASM) is subject to the requirements of supervisory law applicable to its remuneration system.

ASM is governed in detail by an internal directive that aims to establish a sustainable remuneration system, while avoiding false incentives to take excessive risks. In addition, the Remuneration Guidelines of the Liechtensteinische Landesbank AG also apply. These define uniform group-wide standards for the structuring of remuneration systems. They include the remuneration principles, e.g. for structuring the variable remuneration and the relevant remuneration parameters. Implementation of the Remuneration Guidelines is designed to take account of the long-term perspective of the remuneration systems, thereby avoiding false incentives to enter into excessive risk.

The remuneration system of LLB Asset Management AG is reviewed at least once each year by the Group Internal Audit of the Liechtensteinische Landesbank AG in respect of its appropriateness and adherence to all requirements of supervisory law pertaining to remuneration.

The payment of remuneration for the work performance of the employees of ASM is in line with the goals and values as well as the business strategy of ASM. Account is taken of criteria such as risk adjustment and sustainability, the avoidance of conflicts of interest, and the principle of proportionality.

As a rule, the total remuneration of ASM employees, who are divided into employee categories, comprises a fixed and a variable component. The fixed component encompasses all agreed contractual or regulatory remuneration already defined before the rendering of the performance, and can consequently not be influenced by the individual employee. This means the fixed component provides compensation for the performance of the tasks that make up the job description of the employee's position.

The variable components encompass in particular remuneration elements that vary according to different criteria (in particular the performance of the individual employee or the employee's department). For this reason, the variable components constitute remuneration elements that are paid ex post, i.e. following the rendering of the specific performance that determines the level of the variable component. Payment thereof is subject to the complete discretion of ASM. Agreements on objectives are used as the basis for quantifying the performance rendered. In addition to financial goals (although under no circumstances goals that are dependent on the performance of ASM) and non-financial goals, other objectives relating to employee conduct also flow to a significant extent into the performance appraisal that is used to formulate the individual goals of an ASM employee. In this regard, the remuneration of an ASM employee under no circumstances is based on or correlates directly with an asset management mandate managed by ASM or the performance thereof.

Depending on the particular employee category and the associated different income classes, the relationship between the fixed component and the variable component is structured in such a way that a reasonable relationship exists between them, or that the payment of the variable component may be waived entirely. Depending on the particular employee category, variable remuneration components may be frozen for a period of at least three years in order to avoid short-term incentives.