MONTREAL, April 12 /CNW Telbec/ - The Caisse de dépôt et placement du
Québec today released its annual report for fiscal year 2010, following
its tabling in the National Assembly by the Québec Finance Minister.
"I am pleased to present the 2010 annual report that provides an account
of the Caisse's activities. This annual report allows Quebecers to see
our progress and strong results in 2010. We still have much work to do
but I am convinced that our organization is on track," said Michael
Sabia, President and Chief Executive Officer of the Caisse.
In addition to the detailed analysis of financial results published on
February 24, 2010, this annual report includes sections on key elements
to better understand the Caisse's activities. Here are the highlights:
The Caisse achieved a 13.6% return, outperforming its benchmark index by
4.1% and significantly outpacing its peers.
Nine of the 11 actively managed portfolios outperformed their benchmark
index or added value relative to their targets.
Rigorous and effective management of operating expenses, which have
fallen 14% over two years, or $45 million.
Implementation of a new operational business model.
Achieved objectives arising from the five strategic priorities to
strengthen the Caisse's foundations.
Changes were made to the portfolio offering to simplify it and make it
more transparent and flexible for depositors.
Assets with similar characteristics and risk-return profiles were
grouped into the same portfolio.
To broaden the range of choices for depositors, certain fixed income and
equity portfolios are now indexed.
The portfolio offering is complemented by overlay strategies that enable
depositors to customize a hedge against certain risks.
Integration of the risk-return concept into day-to-day investment
Reduction of the overall portfolio's absolute risk (10%) and active risk
(56%), providing the Caisse with additional leeway.
50% decrease in overall leverage over two years.
Strengthening of risk management tools and practices to better identify
and quantify risks — and develop a risk culture based on collaboration
between the Investment and Risk teams.
Contribution to Québec's Economic Development
Adopted of a Québec economic development contribution statement to:
Identify and seize the best business and investment opportunities.
Serve as a bridge to the world.
Contribute to Québec's financial expertise.
Increased total assets in Québec by $3.0 billion, reaching $36.5 billion
at the end of 2010.
$1.8 billion increase in total private sector assets, reaching $20.5
billion in late 2010.
$1.7 billion in new Québec company investments and commitments.
Increased investment in Québec publicly traded companies by a total of
over $800 million since 2009.
The Caisse's new compensation program came into force in 2010. Here are
its main objectives:
Pay for performance while being more demanding than the previous
Offer competitive compensation to attract, motivate and retain employees
with experience and expertise that enable the Caisse to achieve its
Strike the best risk-return balance and align the interests of
management and depositors.
Implementation and enforcement
Rigorous market benchmarking by renowned firm Towers Watson.
Hugessen Consulting, an independent consulting firm known for its
pension fund compensation expertise, validated the new program and its
implementation at the request of the Board of Directors.
Differ and better align interests
To better align the long-term interests of the Caisse's staff with the
objectives of the depositors, a significant portion of the total
incentive compensation is deferred for three years in accordance with
the industry's best practices:
25% of the total incentive compensation for management and portfolio
At least 40% of the total incentive compensation for senior executives.
The deferred amounts paid in 2013 will be based on the Caisse's returns
during the period.
Incentive compensation in 2010: below the median even if returns are
Despite a first-decile return (in the top 10 percent) in 2010, average
total compensation was below the benchmark market median (in the 48th percentile) or well below the Caisse compensation authorized by the
Regulation respecting internal management.
$35 million in total incentive compensation paid in 2011 for 2010
(including $2.5 million for the five highest compensated executives —
see page 112 of the 2010 annual report), compared to:
2009: $20.9 million
2007: $44.2 million
2006: $42.5 million
In addition to the incentive compensation paid in 2011, the Caisse
provided $10 million in deferred incentive compensation, payable only
in 2013 (including $2.0 million for the five highest compensated
executives — see page 112 of the 2010 annual report).
As he undertook to do upon joining the Caisse, Mr. Michael Sabia,
President and Chief Executive Officer of the Caisse, waived for a
second year any incentive compensation.
The Caisse updated its Policy on Responsible Investment. It revolves
around four key areas:
Shareholder engagement by exercising its voting rights
Integration of environmental, social and governance (ESG) criteria
Exclusion of securities from portfolios
Responsible Investment Committee
ABOUT THE CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC
The Caisse de dépôt et placement du Québec is a financial institution
that manages funds primarily for public and private pension and
insurance plans. As at December 31, 2010, it held $151.7 billion in net
assets. As one of Canada's leading institutional fund managers, the
Caisse invests in major financial markets, private equity and real
estate. For more information: www.lacaisse.com.
SOURCE CAISSE DE DEPOT ET PLACEMENT DU QUEBEC
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