Some CDO collateral managers have restructured their existing management fees to remove any performance-based compensation, so that they can avoid consolidation under Financial Interpretation No. 46-R.

Last week, Lincoln National Corp. disclosed with the Securities and Exchange Commission that it had removed performance-based incentives from five of its seven outstanding CDOs. By eliminating the performance-based component, these fees are no longer considered variable, allowing the company to avoid being deemed the primary beneficiary.

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