Total granted compensation – annual bonuses and long-term incentives – are to be capped at 50 per cent of the firm’s underlying pre-tax profit, GAM said in a statement. There will be a group-wide compensation ratio of 45.50 per cent of underlying net fee and commission income, it said.

The group chief executive and chief financial officer annual bonuses will be capped t 250 per cent and 200 per cent, respectively, of their respective salaries. With LTIP awards, the cap is 200 per cent of the face value of salary.

In recent years, both as commercial policy and sometimes driven by explicit regulation, as in the UK, financial organisations have deferred bonuses and structured compensation to discourage short-term risk-taking of the sort blamed for contributing to the 2008 financial crisis. Boardroom pay, and the way that bonuses are paid out, became a hot political issue after the crisis.

In a move designed to make pay fit with shareholders’ long-term interests, GAM said annual bonus deferral will change, so that half of GMB members’ annual bonuses will be deferred into GAM sahres vesting over four years, instead of 33 per cent of that bonus deferred into shares vesting over thre years. A bonus deferral system now also affects non-GMB employees, the firm said.

Other changes include that the group CEO and CFO must hold GAM shares worth at least 200 per cent of their annual salary; other GMB members must hold shares worth 100 per cent of annual salary.

GAM said there will be retrospective vote at its annual meeting on 26 April next year to approve the total level of GMB variable compensation.