bonus style fees

CFA Level III Portfolio Management
#1

Vol 6 page 274 : Bonus style fees- the text says

"Bonus-style fees are the close equivalent of a manager’s call option on a share of active return, for which the base fee is the strike price. Consider Exhibit 8, which shows a familiar-looking option payoff pattern using the fee parameters defined in Exhibit 7. In this case, the option payoff is modified by a maximum fee feature. The graph illustrates three fee components: a 25 bps base fee, plus a long call option on active return with a strike price equal to the minimum (base) fee, minus another (less valuable) call option with a strike price equal to the maximum fee.

I do not get it.

#2

If the active return is negative, you get a bonus of zero.

If the active return is positive, you get a bonus that is a percentage of the active return.

The payoff looks like this: _/.

The payoff on a call option looks eerily similar: _/.

#3

so that is it- payoffs looks similar? that is the point we were supposed to get?

#4

Yes.