(Bloomberg) — Billionaire Steven A. Cohen, whose hedge fund SAC Capital Advisors LP shut down this year to settle charges of unprecedented insider trading, plans to reward employees at his new investment firm for demonstrating ethical behavior.
Starting next year, some of the managers and analysts at Stamford, Connecticut-based Point72 Asset Management LP can earn an extra bonus of as much as 4 percent of compensation if they demonstrate adherence to the firms compliance policy and ethical standards, contributions to the community and repeated strong investment performance, Mark Herr, a spokesman for the firm, said yesterday in a telephone interview.
Are you setting a proper tone and example on compliance and doing the right thing? Are you setting the right tone and doing the right things to develop your analysts? Herr said of the new program, called Rewarding What Matters. Employees can earn the bonus by, for example, raising issues with compliance, suggesting policy changes and serving on charitable boards.
The new policy is the latest step in a series of management and organizational changes that were announced by Cohens firm, after SAC stopped handling client money this year and reached a $1.8 billion settlement with the U.S. The hedge fund pleaded guilty to making hundreds of millions of dollars in illegal profits and fostering a criminal culture. SAC money managers were among the highest-paid in the industry and could earn 15 percent to 25 percent of profits they produced.
Personal Fortune
Cohen, 58, has transformed the firm into a family office to handle his personal fortune and changed its name from SAC, which are his initials. The firm oversees $9 billion to $10 billion and has a staff of about 850 after once managing as much as $16 billion.
Cohen hired Douglas Haynes, a former McKinsey & Co. managing director, earlier this year to be a member of the firms senior management after they worked together on the board of New York charity Robin Hood Foundation. In August, he replaced Tom Conheeney as president. Haynes this week sent a memo to employees outlining a reorganizing of the companys equities business into seven units to help improve accountability.
Point72 earlier hired Palantir Technologies Inc., a Central Intelligence Agency-backed software maker, to boost surveillance and created a new position, chief surveillance officer, naming a former assistant U.S. attorney in Manhattan, Vincent Tortorella, for the role.
The new bonus system was unveiled during a meeting Point72 management held last weekend in Manhattan, Herr said.
SEC Proceeding
Eight former SAC money managers and analysts have pleaded guilty or been convicted of using confidential and material information to profit, and two have settled with federal regulators without admitting or denying wrongdoing.
Cohen has denied wrongdoing and isnt charged with a crime. He is the subject of an administrative proceeding by the U.S. Securities and Exchange Commission that alleges he failed to supervise two senior employees.
In August, U.S. prosecutors asked the SEC to delay its proceeding against Cohen for a second time because criminal cases against his former employees were continuing.
–With assistance from Saijel Kishan in New York.
