Introduction
The Financial Conduct Authority (“FCA” or “regulator”) in the Prudential sourcebook for MiFID Investment Firms in the FCA Handbook (“MIFIDPRU”) sets out the detailed prudential requirements that apply to Orion Resource Partners (UK) LLP (“ORP UK” or the “Firm”). Chapter 8 of MIFIDPRU (“MIFIDPRU 8”) sets out public disclosure rules and guidance with which the Firm must comply, further to those prudential requirements.
ORP UK is classified under MIFIDPRU as a small and non-interconnected MIFIDPRU investment Firm (“SNI MIFIDPRU Investment Firm”). As such, the Firm is required by MIFIDPRU 8 to disclose information regarding its remuneration policy and practices.
The purpose of these disclosures is to give stakeholders and market participants an insight into the Firm’s culture and to assist stakeholders in making more informed decisions about their relationship with the Firm.
This document has been prepared by ORP UK in accordance with the requirements of MIFIDPRU 8 and is verified by the Firm’s partners. Unless otherwise stated, all figures are as at the Firm’s 31 December financial year-end.
Remuneration Policy and Practices
Overview
As an SNI MIFIDPRU Investment Firm, ORP UK is subject to the basic requirements of the MIFIDPRU Remuneration Code (as laid down in Chapter 19G of the Senior management arrangements, Systems and Controls sourcebook in the FCA Handbook (“SYSC”)). The purpose of the remuneration requirements is to:
- Promote effective risk management in the long-term interests of the Firm and its clients;
- Ensure alignment between risk and individual reward;
- Support positive behaviours and healthy Firm cultures; and
- Discourage behaviours that can lead to misconduct and poor customer outcomes.
The objective of ORP UK’s remuneration policies and practices is to establish, implement and maintain a culture that is consistent with, and promotes, sound and effective risk management and does not encourage risk-taking which is inconsistent with the risk profile of the Firm and the services that it provides to its clients.
In addition, ORP UK recognises that remuneration is a key component in how the Firm attracts, motivates, and retains quality staff and sustains consistently high levels of performance, productivity, and results. As such, the Firm’s remuneration philosophy is also grounded in the belief that its people are the most important asset and provide its greatest competitive advantage.
ORP UK is committed to excellence, teamwork, ethical behaviour, and the pursuit of exceptional outcomes for its clients. From a remuneration perspective, this means that performance is determined through the assessment of various factors that relate to these values, and by making considered and informed decisions that reward effort, attitude, and results.
Characteristics of the Firm’s Remuneration Policy and Practices
ORP UK’s remuneration policy is to provide fair and reasonable remuneration to employees based on (i) industry standards and (ii) overall profitability of the Firm for any given period. Remuneration is made up of fixed and variable components. The fixed component, base salary, is generally based on industry standards and comparable positions in the industry in order to maintain alignment with peers. Factors may include, but are not limited to, experience and seniority within the Firm.
The variable component is primarily based on overall profitability of the Firm after accounting for capital requirements and expenses. The fixed and variable components are balanced to provide a reasonable level of compensation in base salary so as not to create an overriding emphasis on performance based compensation. This also allows for the possibility of paying no variable remuneration component, which the Firm would do in certain situations, such as where the Firm’s profitability performance is constrained, or where there is a risk that the Firm may not be able to meet its capital or liquidity regulatory requirements.
Variable performance based remuneration is paid on a discretionary basis and is designed to promote reasonable risk taking in line with general outlook of the Firm and our current offerings. Determination of discretionary variable remuneration is subject to, but not limited to, the following criteria: experience, variable compensation in prior periods, overall Firm performance, achievement of goals set for a period, leadership/teamwork displayed, for investment professionals the performance of their business units, reviews/feedback from management, ESG and sustainability objectives. There is no set ratio between fixed and variable remuneration and this may vary from employee to employee and from period to period.
Governance and Oversight
The Firm does not maintain a Remuneration Committee. The remuneration policy is the responsibility of the Firm’s partners. The partners rely on (i) their input for decisions based on their direct participation in the management of a Firm employee, (ii) base salary determinations made by direct managers of a Firm employee and/or (iii) contractual/formulaic variable remuneration determinations. ORP UK’s remuneration policy and practices are reviewed annually by the Firm’s members with oversight.
Quantitative Remuneration Disclosure
For the financial year 1 January to 31 December 2024, the total amount of remuneration awarded to all staff was £4,241,548.98, of which £2,908,400.09 comprised the fixed component of remuneration, and £1,333,148.89 comprised the variable component. For these purposes, ‘staff’ is defined broadly, and includes, for example, employees of the Firm itself, partners or members, employees of other entities in the group, employees of joint service companies and secondees.