Backlash over reward
42% vote against Standard Life package for new CFO
Investors felt the new SFO’s pay package was inflated (pic: Terry Murden)
Standard Life Aberdeen today survived a shareholder backlash against a pay and bonus package for its new chief financial officer.
The remuneration awarded to Stephanie Bruce was opposed by 42.02% of investors at the annual general meeting as chairman Sir Douglas Flint acknowledged that the board had been ‘expecting a high vote against’ the deal.
Ms Bruce will receive a £525,000 salary — about 17% higher than retiring Bill Rattray – and will join from PwC, where she is a partner. She will also receive a recruitment award worth £750,000, with shares that make up this part of her pay package vesting in equal tranches in June 2020, June 2021 and June 2022.
Standard Life Aberdeen said the one-off award recognised her move from a partnership model, where remuneration was delivered in cash, to a listed company, where a greater proportion of pay is variable and made in the form of equity awards.
Governance body Glass Lewis said it views high fixed pay “with scepticism”. Institutional Shareholder Services also raised concerns.
The row was the latest involving executive remuneration packages but is particularly embarrassing for Standard Life Aberdeen as it has raised objections against other firms introducing similar rewards.
Sir Douglas Flint after chairing his first Standard Life Aberdeen AGM in Edinburgh (pic: Terry Murden)
Speaking at his first AGM since his appointment in January Sir Douglas said the board had responded to calls for conditions to be met, but explained that the bonus deal was structured in a way that took account of Ms Bruce coming from outside the sector.
In a meeting that also focused on gender issues, he said her appointment to one of the most senior positions at the company was an example of diversity.
Earlier he had been challenged by a representative of Share Action to prove the company was doing more to improve the 40% gender gap. He noted a number of measures now in place and said the board would be happy to meet the group to discuss the issue.
Chief executive Keith Skeoch said the company had shown its “resilience” in responding to the most challenging investment year since 2001.