Winters’ pension cut not all it seems

What could be more childish than the highly paid boss of a FTSE 100 company throwing his toys out of the pram in public? Yet, there was Standard Chartered’s chief executive Bill Winters, a 58 year-old grown man, accusing the bank’s shareholders of acting up because they had dared to criticise his generous pension payments.

“Picking on individual pension arrangements... and suggesting that there is some big issue is immature and unhelpful,” he complained to the Financial Times back in July.

There was an issue – a major one. The bank wanted to give Winters a cash pension payout of 40pc of his £1.15m basic salary – the highest for any top executive at a publicly listed UK bank, including Antonio “two pensions” Horta-osório at Lloyds – and a much higher ratio than the rest of the workforce receives.

Six months after more than a third of shareholders voted against the deal, Winters has finally been forced into a humiliating climbdown – of sorts. The bank has agreed to halve Winters’ pension allowance from £474,000 to £237,000. However, it is still sticking stubbornly to its methodology for calculating the figure, despite this being the main reason for shareholder anger.

Instead of calculating the payment as a percentage of base pay, it insists on throwing fixed pay allowance into the mix to take his total salary to £2.37m for last year. This conveniently makes it look like Winters is receiving a much more acceptable amount, one that is in line with other employees and the Investment Association’s new guidelines on executive packages.

But it’s nothing more than smoke and mirrors again. Whereas before the bank tried to claim that he stood to receive a 20pc pension payment, rather than 40pc, now it wants investors to believe that he will get 10pc, when in fact it’s really 20pc.

One could perhaps understand the intransigence if Winters had lived up to the superstar reputation he arrived with from JP Morgan in 2015, but despite Standard Chartered’s big exposure to the high-growth markets of Asia, the Middle East and Africa, its share price has shrunk by a quarter during his reign.

The bank’s half-baked response, which has taken six long months, is reminiscent of how Lloyds reacted to anger over Horta-osório’s pension. A £154,000 cut to his annual contributions was offset with a £175,000 jump in other elements of his pay, a bizarre piece of tokenism that sparked more outrage. Companies that try to game the numbers are taking shareholders for fools.

KPMG’S club cull a PR move

Bill Michael isn’t taking any prisoners at KPMG. The accountancy firm’s fast-talking Australian boss has called time on its swanky Mayfair club just four years into a 15-year lease.

It’s being presented as a cost-cutting exercise – the Big Four beancounter pays £4.1m a year in rent for the ostentatious venue on Grosvenor Street – but it is as much a clever PR move from a firm that has been shaken by repeated scandals.

The entire accountancy profession is under a cloud right now but KPMG seems unable to stay out of the spotlight. It has been fined more than £20m in the last year alone for a string of shoddy audits, including the fashion chain Ted Baker. It is also under investigation for its involvement in the collapse of Carillion, and has been caught up in major controversy in South Africa, Dubai and the US.

Michael’s solution is the dubiously named Project Zebra, a scheme designed to save £100m that will then be ploughed back into KPMG’S audit division, the part of the industry where regulators have the biggest concerns.

The firm is also taking back staff mobile phones, moving marketing staff out to Reading and sacking a third of its personal assistants, and has singled out 65 partners for the chop.

The measures are unlikely to halt sweeping reform of auditing practices. Simon Dingemans, the new boss of the Financial Reporting Council, has added to the chorus of calls for a break-up of the Big Four.

Still, perception is important. If there is one way to give the impression of being hopelessly out of touch, it is a cosy private club in one of London’s most exclusive districts.

‘Companies that try to game the numbers are taking shareholders for fools’