Demonstrated Integration of
Stockholder Feedback into Compensation Program Over Multiple Years
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Stockholder Comments
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Compensation Committee Response
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Improve transparency regarding Performance Assessments
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Expanded the Performance Assessments disclosure, including scores in each category and financial targets, to show the linkage between the assessments and the resulting
awards, and to explain any exercise of Committee discretion
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Performance Assessments should be
more formulaic
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Revised weightings of the assessment categories, to increase the quantitative financial and stock performance factors and reduce the weighting of more subjective
strategic factors in 2018; added disclosure of sub-category weightings and expanded disclosure on subjective qualitative factors in 2019 to further increase transparency
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Disclose financial targets used in the determination of short-term incentive awards
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Disclosed targets used in the cash bonus Performance Assessment, which are set based on projected performance levels; targets include Economic earnings per share and
EBITDA margin, together tracking the efficiency, stability, and growth of our earnings
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Increase proportion of performance-based equity awards
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Significantly increased the proportion of annual performance-based equity awards to 60% of our CEOs total equity incentive awards
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Use a performance metric with broader alignment to stockholder value
creation
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Implemented a new Return on Equity (ROE) metric for performance awards, replacing our use of earnings growth targets, to better align management incentives with the
strategic goals of both growing earnings and effectively managing capital
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Use separate determination processes for cash bonuses and equity awards
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Implemented a quantitative determination process for cash bonuses distinct from the process for determining equity incentive awards, using a new Short-Term Incentive
Compensation Performance Assessment
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Eliminate award re-testing
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Addressed performance award re-testing concerns through the use of a single operating metric hurdle measured over a
single three-year period
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Implement compensation caps for NEOs, in addition to CEO
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Established direct caps on Annual Performance-Based Incentive Compensation for each NEO, in addition to the CEO; also lowered the existing cap on CEO Annual
Performance-Based Incentive Compensation and established a CEO cash bonus cap
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Reduce maximum award values
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CEO compensation declined -43% in 2018, an additional -3% in 2019, and an additional -4%
in 2020, which followed declines in each of the prior five years, for an overall reduction of -65% between 2013 and 2019, demonstrating ongoing attention to the linkage of pay-for-performance and notional levels, as well as the impact of compensation program enhancements
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Reduce CEO compensation caps
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Significantly reduced the caps on CEO Annual Performance-Based Incentive Compensation a -12.5% reduction on the overall cap
in 2018 compared to the prior year and a -30% reduction over the prior two years; reduced formulaic Incentive Pool sizing factor from 6.0% of Adjusted Economic net income to 5.25% in 2019
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The 2019 Long-Term Equity Alignment Award should partially replace future incentive compensation
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The Alignment Award was granted with the expectation that it would replace a portion of Annual Performance-Based Incentive Compensation over a multi-year period, and that
intention was reflected in the compensation determinations for both 2019 and 2020, in which the Compensation Committee reduced the formulaic award payout amounts derived from the Annual Performance Assessments for CEO Annual Performance-Based
Incentive Compensation by -23% in 2019 and -41% in 2020, totaling $6.1 million in reduced compensation for our CEO, specifically related to the Long-Term Equity
Alignment Award
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Executives should hold significantly larger equity stakes
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Equity Ownership Guidelines were revised during the 2018 performance year compensation cycle, to increase the requirement for our President to 10x annual base salary;
further revised in Q1 2020 to add new restriction on selling if executive has not met the required level through an accumulation period; granted one-time Long-Term Equity Alignment Award to CEO and CFO in
2019
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Factor ESG activities into incentive award decisions
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Formal weighting of ESG factors added to both the Short-Term and Long-Term Incentive Compensation Performance Assessment scorecards
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Revise AMGs Peer Group to better reflect AMGs size and business model
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Revised our Peer Group in 2019 to remove BlackRock, Inc. and add Ares Management Corporation and Janus Henderson Group plc, to reflect companies with revenue and market
capitalizations that are more in line with our own, and to include additional firms with significant assets under management in alternative strategies
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Pre-set financial performance targets should account for a larger portion of the Performance Assessments
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Increased the weighting of the Annual Financial Performance component of our Short-Term Incentive Compensation scorecard to a majority weighting of 55%, relative to the Business Initiatives component, to
further enhance managements focus on objective financial metrics
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