Responsibility

AMG believes that sound corporate citizenship and attention to governance and environmental principles are essential to our success and that of our Affiliates. We are committed to operating with integrity, contributing to the local communities surrounding our global offices, diversity and inclusion, developing our employees, and being thoughtful stewards of natural resources. We are also focused on the security of our data and safeguarding our clients’ privacy. AMG’s Board of Directors provides oversight over these environmental, social, and governance (ESG) issues and is committed to supporting AMG’s efforts to operate as a sound corporate citizen. We believe that a conscientious approach to business strategy, corporate governance, and corporate citizenship creates long-term value.

Corporate Governance

AMG has adopted best practices in corporate governance:

  • Independent Lead Director
  • Independent Board Committees
  • World-Class, Diverse, and Experienced Board
  • 25% of Non-Executive Directors are Female
  • Annually Elected Directors (99% average vote for director re-elections in 2018)
  • Majority Vote Standard in Uncontested Director Elections
  • No Overboarding; Ongoing Board Refreshment
  • Publicly Disclosed Corporate Governance Guidelines
  • No Staggered Board
  • No “Poison Pill”
  • “Double-trigger” Vesting Upon Change in Control
  • Annual Say-on-Pay Vote
  • Active Engagement with Shareholders

AMG’s Board of Directors has a highly independent structure, with a strong Independent Lead Director, and all Committees are composed entirely of independent directors (with all Audit Committee members considered to be “audit committee financial experts”). The Board undertakes annual self-evaluations (across the full Board and in each Committee) and individual director assessments. It is actively refreshed to maintain a wide array of qualifications, skills, and attributes. The Board has elected four new Directors since 2012, and appointed new Chairs of all three Committees and a new Independent Lead Director in 2015.

The Company’s amended and restated by-laws provide for majority voting in uncontested director elections. Under the majority voting standard, directors are elected by a majority of the votes cast, which means that the number of shares voted “for” a director must exceed the number of shares voted “against” that director. In a contested election (a situation in which the number of nominees exceeds the number of directors to be elected), the standard for the election of directors will be a plurality of the votes cast. Any director that is not elected must tender his or her offer to resign.

Governance and Compensation Practices

Our Board of Directors is committed to maintaining responsible compensation practices and believes that rewards for our senior leaders should be commensurate with the results they achieve for our stockholders. Our strong governance procedures and practices with respect to employment and compensation include the following:

What we do:

  • Annual Say-on-Pay vote
  • Caps on Performance-Based Incentive Compensation for each NEO, including the CEO
  • Equity ownership guidelines for NEOs and directors requiring long-term ownership of equity totaling a multiple of base salary or directors’ fees
  • Double trigger vesting upon change in control
  • A clawback policy that allows, under certain circumstances, for the recoupment of performance-based compensation from executive officers
  • Mitigation of dilutive impact of equity awards through share repurchases
  • Significant portion of variable compensation is performance-based equity awards tied to key business metrics
  • The substantial majority of overall compensation is in the form of variable performance-based incentive awards, with base salary and other fixed compensation generally expected to form only a small portion of total compensation
  • A thorough risk assessment process, as described under “Risk Considerations in our Compensation Program” in our Proxy statement

What we don't do:

  • No employment agreements with the Executive Chairman, Chief Executive Officer or President and Chief Financial Officer
  • No golden parachute change-in-control agreements with our executives
  • No tax reimbursements or gross-ups for any perquisites
  • No hedging or pledging of AMG securities by directors or officers
  • No option re-pricing or buy-outs of underwater stock options
  • No option grants with exercise price below grant date stock price
  • No payment of dividends on equity awards prior to vesting; accrued dividends are only delivered following vesting and satisfaction of any performance conditions
  • No excessive perquisites

Director On-boarding and Training

When a new non-executive director joins the Board of Directors, we provide an orientation program that includes personal briefings by senior management on the Company’s operations, strategic plans, financial statements, governance, and key policies and practices. New directors also undergo in-depth training on the work of each committee of the Board. Throughout their tenure on the Board of Directors, each director is expected to maintain the necessary knowledge and information to perform his or her responsibilities as a director. To assist the directors in understanding the Company and its industry and maintaining the level of expertise required for the director, the Company will, from time to time, offer Company-sponsored continuing education programs or presentations, including sessions on select topics during the annual Board of Directors offsite. Additional training is also provided when a director assumes a leadership role, such as becoming the chair of a committee.

Business Ethics & Risk Management

AMG maintains a strong corporate culture that promotes the highest standards of ethics and compliance for our business. Our Code of Business Conduct and Ethics sets forth the important principles guiding the conduct of our employees, officers, and directors. The Code governs the management of conflicts of interest and corporate opportunities, prohibits any engagement in unlawful activity in conducting AMG’s business, and requires that all business matters be conducted in accordance with ethical standards and applicable laws. Employees certify, at least annually, that they have read and agree to comply with the Code. Employees are required to report violations of the Code, or of any applicable law, rule or regulation to the Company. Reporting of any actual or suspected code violations, misconduct, or concerns may be done confidentially through an independent, third-party operated “whistleblower” hotline, or to the employee’s manager, Human Resources, or the Chief Administrative Officer. AMG strictly prohibits retaliation in response to such reporting.

AMG takes seriously its responsibility to conduct its business in a manner that avoids conflicts of interest and the potential for improper influence. AMG’s Policy on Political Contributions and Other Restricted Payments requires full compliance in the conduct of AMG’s business with all political contribution, anti-bribery and anti-corruption laws of the jurisdictions in which we and our Affiliates conduct business, including but not limited to the Foreign Corrupt Practices Act, the UK Anti-Bribery Act, and federal and state pay-to-play statutes and regulations. Under the Policy, employees are prohibited from offering any payment, gift or contribution, either directly or through intermediaries, for the purpose of obtaining or retaining business for AMG or our Affiliates, or gaining an advantage in the conduct of any business. Any political contributions by employees to candidates for federal, state, and local office must be pre-approved and reported on a quarterly basis. Employees are required to certify at least annually that they have read and agree to comply with the Policy. To avoid even the appearance of conflict with our Affiliate investment operations, AMG has adopted a strict policy that prohibits employees from trading in their personal accounts in any publicly traded security.

AMG’s Board of Directors has principal responsibility for oversight of our business ethics and risk management process; the majority of Directors have extensive background and experience in risk management. AMG has an internal audit function which reports to the Audit Committee of the Board of Directors on the Company’s position with respect to risk. Executive management reports to the Board quarterly and annually on risk management practices, AMG’s adaptation to the changing risk environment, capital planning, liquidity planning, and market risks. The following documents are available on AMG’s corporate website: Corporate Governance Guidelines; the Code of Business Conduct and Ethics applicable to all directors, officers and employees; the Code of Ethics applicable to our Chief Executive Officer, Chief Financial Officer and other senior financial officers; and the charters for the Audit, Compensation and Nominating and Governance Committees.

Human Capital

For AMG, our employees and our reputation are our most important assets, and attracting and retaining top talent to execute on our business objectives is a fundamental imperative. We have numerous programs to support our employees with respect to their health, family leave, and educational support, and are focused on building employee engagement with communities through corporate citizenship initiatives.

In 2018, AMG launched a series of communications forums to increase the dialogue between senior management and our employees, comprising regular small working group lunches as well as company-wide town halls, which are ongoing in 2019.

Employee Benefits, Development, and Retention

Eligible employees are offered a comprehensive and competitive benefits package. Some benefit programs require contributions and others are fully paid by the Company, including but not limited to:

  • AMG’s 401(k) Profit Sharing Plan
  • Health Insurance Plan (including vision care and prescription benefits); Dental Insurance Plan
  • Flexible Spending Accounts for Health Care and Dependent Care
  • Continuation of Coverage under Group Health and Dental Plans (COBRA)
  • Life Insurance
  • Accidental Death and Dismemberment (AD&D) Insurance
  • Short-term Disability Coverage
  • Long-term Disability Coverage
  • Parental Leave and On-Site Accommodations for Nursing Mothers
  • Accommodations for individuals with disabilities
  • Onsite Fitness Center at Majority of Principal Offices
  • Paid vacation commensurate with years of service
  • Occasional Early Office Closings
  • Flexible work arrangements including a Work from Home Policy

In addition, each employee is required to attend an onboarding session to review benefits, policies, and procedures.

Leadership training and skills development are anchored on a comprehensive performance appraisal process. We believe regular communication between employees and managers fosters a work-based learning environment. AMG encourages its employees to take responsibility for their development, in partnership with their managers, and leverages informal communications alongside annual performance reviews to evaluate employee satisfaction. Employees work with managers to set goals and objectives on an annual basis at minimum.

Occupational Health and Safety

AMG strives to provide a safe and secure working environment for its employees, with formal policies and programs in place to address:

  • Injuries and accidents
  • Substance abuse
  • Highly contagious diseases
  • Violent or threatening behavior
  • Emergency evacuation
  • Weather emergencies and natural disasters

AMG’s health and safety policies are applicable to all facilities and operations. We dedicate significant resources to emergency preparedness and have placed automated external defibrillators (AEDs) throughout our principle offices. In addition to our formal policies and programs, AMG provides optional cardiopulmonary resuscitation (CPR) and AED certification courses for our employees.

Diversity and Inclusion

We are committed to fostering and promoting an inclusive and globally diverse work environment where all of our employees are valued and appreciated for their contributions; we believe diversity and inclusion result in a highly creative and innovative workforce. AMG has an Equal Employment Opportunity and Anti-Discrimination Policy applicable to all employees that prohibits discrimination based on race, color, ethnicity, national origin, religion, sex, pregnancy or pregnancy-related condition, sexual orientation, gender identity or expression, age, physical or mental disability, genetic information, ancestry, veteran status, military service, application for military service, marital status, and other legally protected classifications. Our Equal Employment Opportunity and Anti-Discrimination Policy goes hand in hand with our Anti-Harassment Policy, which prohibits sexual harassment or discriminatory harassment of any kind. Our Anti-Harassment Policy details how to report and respond to harassment issues and concerns, and strictly prohibits retaliation against any employee due to reporting harassment. If AMG determines that a violation of the Equal Employment Opportunity and Anti-Discrimination Policy or the Anti-Harassment policy has occurred, appropriate disciplinary action will be taken against the offending party. We are equally committed to operating in a business environment that promotes equal employment opportunity in our hiring practices and in managing all our employees and this is evident in all aspects of our employment practices and policies. Cooperation with these policies is mandatory and relates to all hiring, promotion, and day-to-day activities of AMG. Reporting of any actual or suspected policy violations, misconduct, or concerns may be reported confidentially to the employee’s manager, Human Resources, or the Chief Administrative Officer. AMG strictly prohibits retaliation in response to such reporting.

We have implemented diversity and inclusion training for all employees to prevent discrimination or harassment, and continually seek to further expand the mixture our employee base as our staff around the world contribute their diverse thinking to improve our business and communities. Our executive management team has responsibility for diversity initiatives, and reviews these with our Board of Directors on an annual basis at minimum.

Approximately 25% of AMG’s senior management team is female. In addition, we are highly attentive to Board diversity and refreshment; 25% of our non-executive Directors are female, above average for S&P 500 companies.

Human Rights and Labor Standards

As a global enterprise, AMG recognizes the importance of upholding the highest standards of human rights across all aspects of our business. AMG is supportive of international efforts against forced labor and human trafficking. While specific laws and regulations may differ in each of our global offices, our core values are consistent and reflected in the way we operate. Globally, our business is increasingly conducted in the local language as part of our ongoing effort to facilitate open and honest communication with all stakeholders.

AMG’s human rights and labor principles apply to all of our offices, facilities, and operations. AMG employees may exercise their freedom of association with regard to collective bargaining in accordance with United Nations Conventions 87 and 98 in compliance with all applicable laws and regulations. We are committed to providing fair and equal wages without discrimination as well as protecting the rights of women and minority groups, as reflected by our Equal Employment Opportunity and Anti-Discrimination Policy as well as our Anti-Harassment Policy.

Our commitment to ethical standards extends to our vendors and suppliers, and we seek to align with businesses that are respectful of the rights of their employees. We expect our vendors and suppliers to provide safe working conditions, fair wages, and prevent discrimination in the workplace. All vendors and suppliers must comply with child labor laws and only hire employees that meet minimum age requirements, in accordance with all health and safety laws.

AMG’s employees may report any actual or suspected violations, misconduct, or concerns regarding human rights or the health and safety of our employees to their managers, Human Resources, or the General Counsel or Chief Administrative Officer. AMG strictly prohibits retaliation in response to such reporting.

Corporate Philanthropy

Through employee engagement in our corporate philanthropic initiatives across our global offices, we are committed to giving back to the communities in which we operate. The AMG Charitable Foundation makes meaningful donations to a variety of non-profit organizations and community programs, supporting educational, cultural, environmental, health, social, and other charitable purposes in these communities.

In alignment with our corporate values of social responsibility, AMG contributed $20 million in 2018 to advance scientific research in amyotrophic lateral sclerosis (ALS) and develop effective treatments for people with ALS, by helping to establish The Sean M. Healey and AMG Center for ALS at Mass General (“The Healey Center”). AMG’s investment in the Center will help broaden the availability of treatments globally. It is our hope to expand the impact of our philanthropic efforts over time through The AMG Foundation, alongside our employees and partners worldwide.

We take pride in supporting the charitable work and contributions of our employees, many of whom serve on non-profit boards or make significant contributions as volunteers within their local communities. Our employees are also generous contributors of their financial resources, including participation in company-wide campaigns to support local charities. AMG has implemented company-supported time off to encourage employees in their charitable endeavors and matches employee donations to eligible non-profit institutions.

As part of our ongoing global philanthropic efforts, we established a company-wide “AMG Day of Service” in 2019 and encouraged employee participation in hands-on volunteering projects. Projects were organized with organizations addressing hunger near our West Palm Beach, Florida; Prides Crossing, Massachusetts; London, England; Greenwich, Connecticut; and Conshohocken, Pennsylvania offices. All organizations benefiting from AMG’s Day of Service are local to AMG offices with the largest concentrations of employees, inspiring employees to further pursue independent volunteer projects in the communities in which they live and work. These and other local organizations further benefit from weekly employee donations in conjunction with “AMG Jeans Fridays.

Cybersecurity and Data Privacy

AMG has a formal information security program, designed to develop and maintain privacy and data security practices to protect company assets and sensitive third-party information (including personal information). This program is governed by a committee comprising members of senior management, including the Company’s Chief Information Officer, which meets regularly and reports to the Board of Directors at least annually.

AMG recognizes the importance of protecting information assets such as personally identifiable information (PII) of our clients and employees, and has adopted policies, management oversight and accountability structures, and technology processes designed to safeguard this information. All AMG employees attest annually to information security policies, and are required to participate in regular security awareness training to protect themselves and the AMG data to which they have access. These trainings also instruct employees on how to report any potential privacy or data security issues.

AMG’s Information Security organization comprises internal and external resources designed to identify, protect, detect, resolve, and recover from various threats and attacks of malicious actors. AMG leverages 24x7x365 monitoring tools and services to address the confidentiality, integrity and availability of company assets and data. Regular internal and third-party reviews are performed on processes and technologies to validate the effectiveness of privacy and data security controls.

AMG monitors best practices and developments in data privacy and security, including increased scrutiny of third-party service providers with access to sensitive company data. AMG works with key third-party service providers to monitor and support the control environment and breach notification processes. AMG also has its own fully documented proprietary security incident response plan, with defined roles and responsibilities that address notification obligations and procedures in the event of a data breach.

AMG is dedicated to business continuity and resiliency. We have documented strategies, policies and procedures in place to protect employee, business, and client data in the event of an emergency or natural disaster.

Environment

At AMG, we are committed to long-term environmental sustainability and reducing our ecological footprint. While we are an investment management company which does not have the direct environmental impact of other industries such as manufacturing, energy or retail businesses, we are committed to using natural resources efficiently and optimizing our energy use. In this regard, we have adopted the following initiatives and programs both to increase environmental awareness among our employee base and reduce our corporate impact on natural resources where possible:

  • Encouraging employees to reduce wastage and usage of paper and plastic, supported by our recycling programs and the elimination of single-use plastic water bottles and plastic straws from our principal offices
  • Prioritizing the use of energy-efficient office equipment, including energy-efficient lighting, setback thermostats and water filtration systems throughout our offices, as well as energy-conserving building materials
  • Reducing our dependence on non-renewable energy, including through our agreement with Constellation Energy to provide our Massachusetts properties with renewable energy that is 100% wind power

As a firm, we also seek to increase the development and awareness of socially and environmentally responsible procurement, and to align with businesses that not only deliver superior quality goods and services, but also operate in ways that are respectful of the rights of their employees and in ways that preserve natural resources and promote environmental sustainability. To achieve this objective, we have adopted the following principles to guide our procurement activities:

  • Evaluate recycled-content, biodegradability, and safer materials in all office-related purchasing decisions
  • Evaluate the social and sustainability practices of vendors, and prioritize relationships with vendors that share our commitment to long-term environmental protection
  • When evaluating prospective vendors, prioritize partnering with businesses that provide their employees a safe work environment and equal employment opportunities
  • Seek partnerships with vendors who not only meet high standards and exhibit continuous improvement, but also conduct their business operations in accordance with all applicable laws and regulations

In 2018, AMG completed an inventory of its GhG Emissions with third-party attestation from PwC. In addition, AMG participated in CDP’s annual climate disclosure; further information on AMG’s disclosure may be found on the CDP Website.

One of our principal offices, in Prides Crossing, Massachusetts, is located on 90 acres of land, the vast majority of which is maintained in its natural forested state with many walking trails accessible to the public.

Responsible Investing

AMG does not directly invest client assets; the investment function sits with our 30+ outstanding Affiliates, which are independent boutique investment management firms with excellent reputations in their areas of specialty. Our Affiliates represent firms of the highest integrity, and today, a substantial majority of our Affiliates demonstrate a commitment to good governance and sustainability by incorporating these factors into their investment processes. Currently, 11 of our Affiliates are signatories to the UNPRI, and 5 are signatories to the UK Stewardship Code. Approximately 75% of AMG’s AUM is managed by Affiliates with formal responsible investment policies which consider ESG practices in their investment strategy, management engagement, and proxy voting decisions. We are proud of this record, and continue to work with our Affiliates on best practices in this area.

While our Affiliates retain operational and investment autonomy, and have their own separate policies and procedures relating to environmental and sustainability matters, we take seriously our responsibility to promote the importance of responsible investing and in addition to our ongoing work with Affiliates, incorporate these factors in our assessment process for prospective Affiliates.

AMG Sustainability Committee

AMG has implemented a Sustainability Committee with oversight of policies and operational controls of environmental, health and safety, and social risks, which reports to the Board of Directors at least annually. The cross-functional Committee includes multiple members of the Company’s executive management team.

AMG fosters an open environment for discussing environmental issues, and we encourage our employees to approach members of our Sustainability Committee with any questions, concerns or suggestions regarding our practices and policies, and support dialogue on how AMG can accommodate sustainability issues in a way that is consistent with the goals of our various stakeholders – including AMG’s stockholders, our employees, our Affiliates, and the investors in our Affiliates’ products.

Tax Disclosure

Taxes paid in the United Kingdom, Canada, and Hong Kong account for over 80% of the Current Controlling Interest Foreign Tax Provision as disclosed in our 10-K.

Our United Kingdom Tax Strategy may be found on our Corporate Governance site.

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