News & Events

Corporate Partner Rajib Chanda was quoted in BoardIQ, a Financial Times news service, in two articles discussing fund director compensation. The article “Some Boards Cut Pay When Assets Plummet and Stay Low,” discusses instances when directors have cut their own pay in times of long-term outflows to signal solidarity with shareholders and to lower the expense ratio. “When you benchmark yourself over time, if your assets have declined to the point that you’re in a different peer group of boards, it might be appropriate to revisit the overall compensation level,” says Rajib. However, Rajib also points out the irony behind the decision to decrease pay, as often when a fund sustains significant outflows, directors in fact have additional work. Another option that Rajib suggests is for directors to defer compensation to a later date if a board believes its pay is out of step with the current reality of the fund’s performance.

Rajib was also quoted in the article “Special Issue: Fund Directors Tap Brakes on 2016 Raises.” The article discusses the changing fund director pay structure, which is impacted by increased board consolidations. When consolidating two boards, Rajib suggests directors should look beyond what each individual member should earn and instead think about the overall compensation paid to the board as a whole. Rajib notes that though a assets play a role in pay determination, smaller fund groups tend to not weigh it as heavily for pay determination, since certain director responsibilities such as board meeting attendance and 15(c) review are present regardless of size.