Footsie bosses battle outrage over pensions
Companies aim to beat backlash after string of investor revolts
Britain’s biggest firms are scrambling to contain a backlash over bosses’ lavish pension perks after a string of investor rebellions.
Blue chip companies in the FTsE 100 have come under unprecedented attack this year for paying bosses far more generous contributions towards their retirement than are available to ordinary staff.
A host of companies have already taken action to cut back on bosses’ payouts, with more expected to follow suit.
in total, 47 businesses in the Footsie last year paid their bosses pension contributions that are at least a quarter of the size of their vast base salaries.
Trade body the investment Association says that executives on new contracts should not receive more than 15pc of their salary in pension contributions, and existing bosses should get less than 25pc.
Ordinary staff – who of course earn far less anyway – typically get much lower contributions, normally no higher than 15pc.
Among the worst offenders is Lloyds, which gave chief executive Antonio horta-Osorio (pictured with wife Ana) a pension payment of £573,000 last year – equal to 46pc of his base salary, when most ordinary workers at the bank get no more than 13pc.
Lloyds is cutting 55-year-old horta-Osorio’s payments to 33pc, or £419,000, this year but increasing other elements of his pay.
The change was not enough to prevent a scathing attack from MPs on the Commons pensions select committee, who hauled directors before Parliament in June, although it did head off a revolt over pay at the bank’s annual meeting.
Another bank roundly criticised was standard Chartered, which suffered a rebellion by almost 40pc of shareholders at the lender’s annual meeting over the £460,000 pension bonanza for chief executive Bill Winters, 57. he then himself got in hot water when he branded investors ‘immature’ for the outcry over the payment – which was equal to 40pc of his salary – and was forced to apologise.
The bank is now looking at ways to diffuse the row, and it is widely thought Winters’ pension could be cut.
Other companies that offer particularly generous pension pots include Dublin-based building materials firm CRh, where 57year-old boss Albert Manifold was given a £625,000 pension equal to 46pc of his salary, prompting a 15.5pc vote against his pay. Meanwhile, textbook publisher Relx handed 56-yearold chief executive Erik Engstrom £545,000, or 45pc, of his salary.
Most bosses receive the money as cash, whereas ordinary workers cannot access their workplace pension until retirement.
Andrew Ninian, of the investment Association, said: ‘investors have been clear that they expect companies to pay executives the same pension contributions as paid to the majority of the workforce. it is simply not fair that executives enjoy pension perks that far exceed those of the rest of their employees.’