Opposition to remuneration at insurer
Standard Life shareholders revolt over Skeoch pay deal
The main target was chief executive Keith Skeoch who last week attempted to pre-empt a row over his pay package by volunteering a £700,000 cut in his bonus. However, he is still entitled to £2.8 million on top of his £700,000 basic salary.
Shareholders meeting in London today voiced their opposition with 22.31% voting against the remuneration deals for executives.
Before the vote, chairman Sir Gerry Grimstone defended the company’s remuneration policy, stating that the company believes in “pay for performance.”
He told the meeting: “Operating responsibly means that we should run our company to the standards that as a major investor we rightly expect from others. This includes how we pay our senior executives.
“We must have good people managing our company who are fairly incentivised in what is a global market place but this doesn’t mean we shouldn’t be conscious of our societal impact and the views of others.
“When we appointed Keith Skeoch to replace David Nish last year, the remuneration committee restructured his pay to reflect his new responsibilities running both a global investment company and a life assurance business.
“We believe in pay for performance and although, compared to his predecessor, the variable component was increased, his basic salary was decreased, deferral was lengthened, and shareholding requirements were tightened.
“We also set stretching targets so that the highest levels of reward required very high performance. The fact is that many of our shareholders agreed with us on this – other’s didn’t.
“Attitudes towards what is appropriate remuneration constantly evolve and what is right one year isn’t necessarily right the next. We listened to the feedback and discussed what to do.
“As a result of this, we announced last week that Keith Skeoch had confirmed to the chairman of the remuneration committee that he had voluntarily decided not to accept the maximum opportunity awarded to him in 2016 under the Standard Life executive long-term incentive plan and was therefore handing back part of his entitlement. This was absolutely Keith’s decision which he volunteered but I personally applaud it as being the right thing to do in the circumstances.
“This change, of course, has come too late to change the directors’ remuneration report which you will be voting on today and a number of shareholders have already voted before the change was made. We will continue to engage with shareholders on these matters.”
On the European Union membership referendum, Sir Gerry reiterated Standard Life’s position. He said: “We believe that access to the EU Single Market is in the best interests of our customers and clients.
“The Single Market has created an environment that gives individuals and businesses the confidence to invest for the long term and it would be potentially damaging to the UK economy and therefore to companies such as Standard Life if the UK were to leave it.”