Pay rise for Magellan’s Douglass despite underperformance
Magellan chair and lead portfolio manager, Hamish Douglass, has seen his remuneration increase to $2.73 million, despite underperformance of his Magellan Global fund.
In an announcement to the Australian Securities Exchange (ASX), Magellan said Douglass’ fixed remuneration had increased from $2.5 million to $2.73 million per annum from 1 July, 2021. It would also increase annually by 3% with the first increase to come into force on 1 July, 2022.
In 2016, his pay was moved to a salary from a salary of $1.2 million per annum to a salary of 1.5% of the average operating profit before income tax expense for the funds management segment plus short term incentive payments but then was changed back in 2018.
Since July 2018, Douglass had been receiving fixed pay of $2.5 million plus variable remuneration of up to 200% of his fixed remuneration based on the performance of the global equities strategy over a three-year period. The variable remuneration measures would remain unchanged from 2021 onwards.
However, his Magellan Global fund significantly underperformed in the past year with returns of 5.8% over one year to 31 May, 2021, compared to returns of 24.2% by the global equity sector within the Australian Core Strategies universe, according to FE Analytics.
Douglass has acknowledged the fund missed out on the short-term rally caused by the vaccine trials last November but that the fund was a long-term offering and he was happy with the portfolio’s defensive allocations.
“Do I lose sleep over missing out on some of this short-term rally? No. We are never going to bet on an oil strike or the equivalent, which is one way to see the vaccine results,” he said at the time.
Shares in Magellan Financial Group had also fallen 4% over the year to 1 July, 2021, compared to returns of 27% by the ASX 200.
However, shares significantly outperformed over three years with the company seeing share price gains of 165% over three years to 1 July, 2021, compared to returns of 31% by the ASX 200.
AUTHOR
Laura Dew
Recommended for you
Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equity firm.
Asset managers may be urged to diversify their product ranges, but investment executives have warned any M&A deal should avoid simply filling gaps and instead consider long-term value creation.
Fund managers are entering 2025 with the most bullish sentiment since August 2021 and record high allocations to US equities, thanks to the incoming Trump administration.
An independent expert has ruled the Perpetual deal with KKR is no longer in the best interest of shareholders in light of the increased tax liabilities.
