incentive fee

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Incentive fee

Compensation paid to commodities trading advisers or to any practitioner who achieves above-average returns. Sometimes called performance fee.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Incentive Fee

A fee paid to an asset manager or other investment adviser whose investment decisions perform particularly well. When an asset manager makes money for clients, he/she also makes money for the company for which he/she works. These companies offer incentive fees in order to encourage wise (and profitable) investments. Incentive fees usually come out of the portfolios that do well, rather than out of the company's general funds. They are also called performance fees. See also: Bonus, Manager Universe (Benchmark.)
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

incentive fee

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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OTS generates revenues from recurring management fees and performance-based fees for the funds and products that it manages.
NACDS' recommendations for the fees cover: the factors involved in determining beneficiary payment and pharmacy reimbursement at the point of sale; implementation of a meaningful and consistent pharmacy-specific, pharmacy-based quality incentive program; a cap on performance-based fees; and further guidance from CMS to foster greater transparency and consistency in the use of fees and incentives.
On the contrary, ETFs are investment vehicles that can carry low, high or even performance-based fees. Conceptually, it's like assuming a hedge fund or a private fund structure is designed for high fees, when in fact low fees can exist among such funds.
The policy provides specific guidance to investment managers and staff regarding the preferred structure of fulcrum fees (fees centered on a target, or "fulcrum," performance level, which are increased or decreased for better or worse performance) and performance fees (additional, performance-based fees paid when an investment manager achieves an investment return that beats a specified benchmark).
Performance-based fees prove very difficult to define in these situations, Ternoey notes.
In any event, performance-based fees are no panacea.
When asked which pricing model they would prefer for On Demand solutions, most recipients (24%) answered Don't Know, with the remainder very much split between flat fee payments, usage-based charging, traditional up-front license fees and performance-based fees.
Over the life of the site contract, LITCO replaced the base fee with performance-based fees and revenue generated from technology transfer royalties brought to the marketplace, as well as profits from successful industrial partnerships.
* Prohibit contingency or performance-based fees and the use of auditing services as a marketing tool.
Opinion is sharply divided on the merits of performance-based fees. Where one comes down on this issue has less to do with the intellectual merits of the case than with the vested interests at stake.
RELATED ARTICLE: A few words about performance-based fees.

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