Investor backlash at Standard Chartered
Pensions row triggers revolt over fat cat pay
THE boss of Standard Chartered launched a robust defence of his lucrative pay deal as he faced a furious backlash from investors.
Striking a defiant tone ahead of the bank’s annual meeting, Bill Winters dismissed complaints about his earnings, including the £474,000 he will get towards his pension this year alone.
But just hours later he was given a bloody nose when 36.2pc of shareholders voted against the bank’s pay policy in one of the biggest investor rebellions so far this year.
It will be seen as a major blow to the London-based bank’s reputation as it seeks to move on from a major money laundering scandal.
Standard Chartered will now hold meetings with investors to try to reassure them it is behaving responsibly. Christine Hodgson, chairman of the lender’s pay committee, said: ‘Although the policy was approved, we need to engage further on this.’
The bank has been caught up in a huge backlash over pensions for chief executives, which tend to be far more lucrative than they are for ordinary staff. Last year, Winters got £460,000 in contributions from the bank, equal to 40pc of his £1.2m cash salary.
Most Standard Chartered employees are given contributions of just 10pc. Guidance from the Investment Association trade body says that bosses should get the same deal as their workers, and no more than 24pc at most.
In what was seen as a stealthy bid to head off criticism, the bank has now changed what it calculates Winters’ pay against, to massage the numbers.
From this year it is lumping his cash salary in with a fixed pay allowance, meaning they are together worth £2.4m.
The change allowed the bank to claim that Winters will get pension contributions of 20pc against this figure. But the actual amount he is being given for his pension is going up by £14,000 to £474,000 this year, due to an annual pay rise. Winters was defiant about his pay.
Ahead of the annual meeting, the 57-year- old said: ‘I don’t know what the focus on pension allowances is when we’ve been totally transparent that the board decided not to impose a pay cut on me, not to violate the contract that they have with me. That’s it. I mean the rest is noise.’
Others have also been criticised on pension arrangements. Lloyds sought to head off criticism by cutting chief executive Antonio Horta-Osorio’s pension by £154,000 from 46pc to 33pc of his base salary.
But it has been criticised for offsetting this with a £175,000 increase in other elements of his fixed pay.
Lloyds has claimed the two are not linked, and that HortaOsorio is getting a pay rise because new regulations have made his job more complicated.
Meanwhile, Barclays boss Jes Staley suffered a 29.2pc rebellion on his pay last week because investors thought that the bank did not go far enough in docking the bonus he received after he wrongly attempted to unmask a whistleblower.