Bonuses blasted by ex fund manager

Fresh raft of multi-million pay deals heap pressure on City

A FORMER fund manager has criticised pensions companies for paying huge bonuses to staff while offering a poor deal to customers.

David Pitt-Watson said he is ‘uncomfortable’ with the lavish awards on offer, describing them as ‘out of sight’ for ordinary, hard-working people.

The intervention from PittWatson, who has campaigned against high pension charges, comes after the Prudential revealed nine board directors shared pay and perks worth £49m last year.

Its outgoing chief executive Tidjane Thiam saw a 36pc increase in his pay package to £11.8m and fund manager Richard Woolnough received more than £15.3m.

But yesterday, more extraordinary details of the staggering sums handed to company executives emerged, including:

A shares windfall worth almost £3m for the Pru’s top PR man;

A £10.7m shares bonanza for outgoing boss of housebuilder Barratt;

Incoming BG Group chief executive will receive up to £25.8m this year in pay and perks.

Pitt-Watson, who stepped down as chairman of Hermes Focus Funds in 2012 and is now a fellow at the London Business School promoting responsible investment, hit out at the huge awards enjoyed by company bosses.

He said: ‘I don’t hear people objecting to Richard Branson being rich – you can see how he made his money. But it is a worry when it comes to people running companies that haven’t done that well or have been hugely successful selling products which have been not been successful for customers.

‘Big payouts are particularly troubling at pensions firms – because many of these have not been serving their customers very well.’

Pensions companies, including Prudential, have been criticised for offering poor annuity rates.

Yesterday it emerged that the extraordinary riches at the Pru are not just reserved for its board directors and fund managers. Head of PR John Murray was handed shares worth almost £3m from long-term shares bonuses on top of a rumoured basic salary of £1m.

Pitt-Watson, who was behind an influential report claiming that almost 40pc of money saved into a pension over a lifetime can be eaten up in charges, added: ‘The notion that people paid a very high salary then need to be paid multiple times that in a bonus seems out of kilter. Certain senior salaries at big companies are moving out of sight of those of normal hard-working, responsible businesspeople.’

Prudential has defended its awards, pointing out that dividends for shareholders have increased and its share price has risen strongly as profits jumped 14pc last year to £3.2bn.

Fellow FTSE 100 firm BG Group also faced criticism over excessive pay as it published its annual report. This confirmed the details of incoming boss Helge Lund’s extraordinary pay package, which could be worth up to £25.8m this year and up to £15.2m thereafter.

The package includes a £1.5m basic salary, an annual bonus worth up to £3m and a ‘golden hello’ long- term shares award worth up to £10.6m. He also receives a £480,000 relocation allowance to move across to the UK from Norway, where he ran Statoil until October.

His pay package could have been even bigger, but BG was forced to cut the golden hello payment from a maximum of £12m to £10.6m in the face of a shareholder revolt.

Mark Clare, who will stand down as chief executive of Barratt in July, has cashed in £10.7m of shares.