Jurgen, as a portfolio manager, should monitor the client's portfolio performance and expect additional compensation based on its capital appreciation.
Jurgen, as a portfolio manager, has been informed by her firm's client that she will be compensated based on the capital appreciation of his portfolio each year. In this case, Jurgen should carefully monitor the performance of the client's portfolio and track any changes in its value over time. If the portfolio experiences an increase in value, Jurgen can expect to receive additional compensation beyond what her firm provides. On the other hand, if the portfolio decreases in value, Jurgen may receive a lower level of compensation. This compensation structure incentivizes Jurgen to make investment decisions that aim to maximize capital appreciation for her client's portfolio.