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UPDATE 2-StanChart bows to investor ire by cutting pension of CEO Winters

UPDATE 2-StanChart bows to investor ire by cutting pension of CEO Winters
Image Credit: Pixabay

Standard Chartered joined some of its British rivals in cutting its chief executive's pension allowance on Friday after protests from shareholders, putting pressure on other banks such as Lloyds to follow suit. British banks have faced mounting criticism from investors for awarding their top executive's more favorable pension arrangements than the rest of their employees.

Standard Chartered said its CEO Bill Winters and Chief Financial Officer Andy Halford had agreed to have their pension allowances cut to 10% from 20% of their salary from January, putting them in line with the rest of its workforce in Britain. The bank's definition of 'total salary' includes both a base salary and a fixed pay allowance paid in shares. Therefore as a proportion of his base salary alone, the pension allowance Standard Chartered awards Winters will fall from 40% to 20%.

Winters had previously defended his pension arrangements, saying in an interview with the Financial Times that investors that voted against his allowance "immature and unhelpful". But Standard Chartered said in a statement on Friday that taking investors' views into consideration, its remuneration committee had concluded it should make the changes to avoid "distraction" from delivering the bank's business strategy.

MARKET RATE Britain's biggest mortgage lender Lloyds has also attracted heavy criticism, with its CEO Antonio Horta-Osorio accused this year of "boundless greed" by MPs for not giving up his pension allowance, which is equivalent to 33% of his salary.

Horta-Osorio, who received a 6.3 million pound pay package in 2018 and accepted a cut to his pension contribution from 46% in February, defended his salary and pension during grilling in Parliament, saying they were in line with the market rate. Lloyds has previously said executive pay levels would be reviewed ahead of the bank's annual meeting next year.

The UK division of Spanish bank Santander and Barclays also pay their CEOs pension contributions above 10%, with Santander's Nathan Bostock getting 35% and Barclays' Jes Staley receiving 17%, or 34% of base salary if a fixed share award is excluded from the calculation. However, HSBC's Noel Quinn and RBS's Alison Rose both get a 10% pension contribution, after the lenders cut their CEO pension levels this year.

In May 36% of votes cast at Standard Chartered's annual shareholder meeting were against its remuneration report, which had recommended that Winters receive a pension allowance in 2019 of 474,000 pounds on top of his fixed salary in cash and shares of 2.4 million pounds. The changes mean that in 2020 Winters' pension allowance will drop to 237,000 pounds and Halford's to 147,000 pounds. This will reduce the maximum bonus the pair can receive by 8% since their bonuses are capped at 200% of their fixed pay. ($1 = 0.7804 pounds)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)



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