Your chance to vote AGAINST Nationwide’s fat cat pay deals
SOME 15million customers of Nationwide, the country’s largest building society, are being urged to make a stand against fat cat pay at the annual general meeting, to be held in 11 days’ time. They are being asked to vote against the directors’ remuneration report – and in particular the £2.372 million awarded to chief executive Joe Garner in the society’s last financial year. This represented an increase of 2.3 per cent on the year before.
The call to action, from lobby group the Building Societies Members Association, comes as Nationwide is in the process of telling savers it is making savage rate cuts to a phalanx of accounts including cash Isas. In some instances savers will see interest payments halve to as low as 0.3 per cent. A whole range of accounts are impacted including Flexclusive Isa, Flexclusive Saver and Flex Online Saver.
The reductions, that come into effect from the start of next month, have angered many savers who are perplexed by the society’s decision given the Bank Base Rate has not moved since August last year when it increased to 0.75 per cent.
Retirees Marilyn and Mark Churchill, from Fareham in Hampshire, have already voted against the directors’ remuneration ahead of the AGM before receiving details of the cuts. Marilyn has now closed one of her savings accounts in disgust, moving her money into Premium Bonds offered by Government savings bank National Savings & Investments. ‘Nationwide’s
website goes on about the “little things” that they do for savers that help a lot,’ 74-year-old Mark told The Mail on Sunday last week. ‘Well it’s not helping us by cutting our interest payments that are so vital to us.’
The vote on directors’ remuneration will be completed at the society’s AGM in Manchester on Thursday week. But customers, like the Churchills, have been voting ahead of it, by both post and online.
The BSMA, chaired by long-time Nationwide customer Alan Debenham, has long argued the society should not be making multimillionaires of its executives. Debenham describes seven-figure annual pay packets as ‘morally indefensible’ at an organisation that is owned by its members and not run primarily to make profits.
In the year to April 4 this year, all four Nationwide executives received seven-figure packages ranging from £1,351,000 to Garner’s £2,372,000. The chief executive’s remuneration included a £1million plus bonus as well as benefits of £185,000. Last year, only 9.25 per cent of customers who voted protested against the directors’ remuneration. But Debenham argues this is because most people opt for the ‘quick vote’ option which hands over their vote to the society’s chairman David Roberts.
He, in turn, then uses these votes to support all the resolutions put forward at the AGM, including the one approving the directors’ remuneration report. Nationwide admits 80 per cent of voting customers use the quick option.
The only way for savers and borrowers to show their disapproval about executive pay is to opt for the ‘standard vote’. This permits them to vote against the directors’ remuneration report. The deadline for voting is a week on Monday although those who attend the AGM can delay their vote until then.
Any vote on directors’ pay is ‘advisory only’ which means Nationwide would not be compelled to take any action if the vote against rose dramatically. Only if a majority of customers voted against would the society, in Roberts’s words, ‘consider this vote extremely carefully’.
Nationwide insists Garner’s remuneration is below ‘the market average’. On savings rates, it says it has made the cuts because ‘it needs to balance the needs of borrowers and savers’.
It adds: ‘Competition has driven down mortgage rates which means rates must be adjusted to ensure the society remains sustainable in the long term.’ Last year, the society made profits of £833 million.
Since The Mail on Sunday exclusively reported details of Garner’s remuneration last month, readers have overwhelmingly registered their disgust at the near £46,000-aweek he receives. Many have suggested Garner’s pay should be linked to savings rates, so if savers receive no increase, he shouldn’t either.