Fat cats pocket £100m fees from City merger (as 800 jobs axed)
bankers are set to share a near-£100million windfall from a City supermerger that will lead to the loss of 800 jobs.
The £11billion deal to join standard Life and aberdeen asset Management will create one of the largest investment firms in the world.
but while many staff are now fearing for their futures, highlypaid bosses will share a £35million bonus pot to convince them to stay.
The tie-up will also trigger a £97million fees bonanza for bankers, lawyers and other advisers working on the deal.
among those cashing in are Goldman sachs, JP Morgan Cazenove and Credit suisse as well as lawyers at slaughter and May and spin doctors at public relations firms in the City.
Yesterday politicians said the plans to axe hundreds of jobs while doling out a total of £132million to bosses, bankers and advisers was ‘a huge concern’. standard Life and aberdeen are both based in scotland and have a total of 9,000 staff, including overseas offices.
The combined company will be run by standard Life chief executive keith skeoch, 60, and his 61-year-old counterpart at aberdeen Martin Gilbert, in a controversial power- sharing arrangement.
Mr skeoch was paid £2.7million last year and £3.5million the year before while Mr Gilbert, an old friend and fishing partner, earned £2.8million last year having picked up £4.3mil- £2.7m pay: Keith Skeoch lion the previous year. Merger documents say job losses will be phased in over three years with compulsory redundancies kept to a minimum.
at the same time, the two firms are desperate to keep their most valuable staff and have set aside millions to stop them exiting. a standard Life spokesman said: ‘We have a strong teambased ethos, and this is underpinned by remuneration arrangements which are structured to reward performance over the long term and encourage retention of our talent.
We have specific plans in place to engage and retain our talent through the merger process.’
Papers reveal the firm is set to hand £26million to bankers, £8.1million to lawyers, £1.9million to accountants and £1.8million on publicity. aberdeen is paying bankers and brokers £27.5million while its lawyers are getting £7.5million.
The firm will also shell out a further £500,000 for Pr advice and £400,000 on accountants.
The combined company will be called standard Life aberdeen, and have £660billion of savers’ cash on its books.
The merger is expected to save bosses £200million a year despite one-off costs of £320million. but there was a growing backlash yesterday with election candidates lining up to criticise the deal.
Dean Lockhart, the shadow economy spokesman for the Tories north of the border, said: ‘The merger between these two firms has the potential to create a genuine global player in fund management. However the potential job losses are a huge concern, and both sides need to ensure that they keep them to a minimum.’
George kerevan, an snP member of the Treasury select committee in the last Parliament, said: ‘The new company has said it will try and deal with the proposed job cuts through natural wastage. The new Parliament will hold them to that and I will hold them to that, particularly because it is setting aside such large sums of money for bonuses.’ He added: ‘The weakness in the proposed merger is having a joint chief executive. That is a recipe for trouble. The company needs to revisit that decision.’
a spokesman for the scottish Government said: ‘We will be engaging with both companies as the merger progresses to discuss employment and investment.’
‘That’s a recipe for trouble’