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 RS Compensation Methodology for Portfolio Managers and Analysts
Investing in Our Own Funds
Independent Trustee Fees Invested in RS Funds
Contact the RS Chief Compliance Officer
Proxy
Information
Renewal of the Funds' Investment Advisory Agreement
Critical goals here at RS Investments include recruiting and retaining the best investment talent and then encouraging this talent to operate as a team. To accomplish this, we need to offer excellent compensation packages.
RS Investments professionals and executives maintain a significant ownership stake in the firm. RS Investments has three separate investment advisory operating divisions, each with separate compensation and bonus structures. Each of the firm's portfolio managers is part of the Core Equity Group, the Growth Group, or the Value Group.
In establishing salaries and bonuses, RS Investments considers information regarding industry compensation levels by reference to other investment firms investing in similar categories. In consultation with Terry R. Otton, Chief Executive Officer of RS Investments, the leaders of each Group (Andrew P. Pilara, Jr. for Value, James L. Callinan, John L. Wallace, and William J. Wolfenden III for Growth, Manind Govil for Core Equity), determine all salaries and bonuses for their respective Groups for the Funds for each fiscal year end. Salaries are based on industry standards, as described above.
Bonuses within the Growth and Core Equity Groups are based on a number of factors, including (1) pre-tax investment performance for each account (including the Funds) managed by a portfolio manager compared to a relevant peer group over one- and three-year periods, with an emphasis on the most recent one-year period, and (2) experience.
Bonuses within the Value Group are based on a number of factors, including (1) pre-tax investment performance for each account (including the Funds) managed by a portfolio manager compared to a relevant peer group over a rolling three-year period, with particular focus on account performance during periods of losses in the general market, (2) investment judgment, and (3) analytical process.
Assets under management do not directly affect any individual’s salary or bonus, although the amount of each Group’s assets under management affect the fee revenue attributable to that Group, which in turn affect the maximum amount of money available for that Group’s aggregate salaries and bonuses.
As of June 30, 2008, the employees and officers of RS Investments had investments in RS Funds valued at approximately $39 million, of which approximately $33 million was held by RS Investments' investment professionals (34 portfolio managers and analysts). RS Investments' officers and employees are required to hold investments in RS Funds for at least 90 days. The bottom line - we're investing right alongside you.
| Funds |
Investment Professional Assets |
Total Employee Assets |
| RS Emerging Growth Fund: |
$5.7 million |
$6.3 million |
| RS Smaller Company Growth Fund: |
$1.7 million |
$2.0 million |
RS Select Growth Fund:
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$0.9 million |
$1.1 million |
| RS MidCap Opportunities Fund: |
$0.9 million |
$1.3 million |
| RS Growth Fund: |
$0.7 million |
$1.0 million |
| RS Technology Fund: |
$2.8 million |
$3.0 million |
| RS Partners Fund: |
$4.4 million |
$5.2 million |
| RS Value Fund: |
$4.5 million |
$5.7 million |
| RS Investors Fund: |
$4.6 million |
$5.4 million |
| RS Global Natural Resources Fund: |
$2.7 million |
$2.9 million |
| RS Small Cap Core Equity Fund: |
$0.2 million |
$0.3 million |
| RS Core Equity Fund: |
$1.3 million |
$2.0 million |
| RS Equity Dividend Fund: |
$0.9 million |
$1.0 million |
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The independent trustees at RS have directed that all of their regular RS trustee compensation be invested in the RS mutual funds as part of a long-term deferred compensation plan.
If you have any fiduciary concerns or corporate governance questions and would like to submit a question or comment to RS Funds/RS Investments, please contact John Sanders, Chief Compliance Officer, by mail at:
John J. Sanders, Jr.
Chief Compliance Officer
RS Funds
RS Investments
388 Market Street, Ste. 1700
San Francisco, CA 94111
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