The chief executive of Standard Chartered has launched a blistering attack on “immature” investors who recently staged a protest against his pay.
Bill Winters made the comments after almost 40 per cent of StanChart’s shareholders declined to back the lender’s new remuneration policy at its annual meeting in May. The protest vote — the largest at a UK bank for five years — followed investor anger over a change in the way StanChart calculated pensions for top executives.
“Picking on individual pension arrangements . . . and suggesting that there is some big issue there is immature and unhelpful,” Mr Winters told the Financial Times.
Mr Winters said he was “perfectly happy to participate in a discussion about whether executive pay is too high outright or relative to something else” but added that some UK-based investors had been wrong to focus on his pension.
This year, Mr Winters will receive a pension cash allowance of £474,000 — the highest of any chief executive of a large UK-listed bank — which the bank says is equivalent to 20 per cent of his “total salary”.
However, the bank arrived at the 20 per cent figure following a controversial change in the methodology it used to calculate executive pension allowances.
Under the new policy, it divides the allowance by his “total salary”, which is a combination of his £1.185m cash salary and a share payment of the same amount.
But under its previous policy, which was in line with the majority of other listed companies, the bank divided executive pension allowances by basic salary alone, meaning Mr Winters’ pension was reported as 40 per cent of his salary.
It was this change in methodology that angered several large shareholders, one of which told the FT the bank was using “smoke and mirrors” to conceal the true size of executive pensions at the bank.
Mr Winters described the off-the-record briefing against the bank by investors before the annual meeting as “shocking” and said the lender had consulted with large shareholders before implementing the changes to its pay policy.
“In the original soundings with shareholders, there were a number of issues . . . but there was no cry of hysteria,” he added, suggesting that investors had ratcheted up their criticism of StanChart after several other banks — including Lloyds, RBS and Barclays — became ensnared in the row over executive pensions.
One top-20 shareholder said that Mr Winters was “in the minority of one” if he thought that there was no issue with his pay.
“He’s not listening to the music,” the investor said, adding that StanChart would continue to suffer heavy protest votes against pay until it changed its policy.
Following the investor revolt in May, StanChart said it would “continue to engage” with shareholders over its new pay policy and publish an update on the discussions by the start of November. Another top 20 investor said that they expect StanChart to revise its remuneration policy.
The protest vote was the biggest to hit a bank since 2014, when the previous management team of StanChart also suffered a revolt over executive pay, according to Proxy Insight.
HSBC is the only large listed bank that fully complies with guidance from the Investment Association, an influential body representing fund managers, which recommends that over time executives should receive a pension allowance in line with the contributions of the majority of employees — which tend to be capped at 10 per cent.
Earlier this year, HSBC responded to investor pressure and agreed to cut the pension contribution for top executives receive from 30 per cent of salary to 10 per cent. Lloyds also cut the allowance paid to its chief executive, although he still receives an amount equivalent to a third of his salary.
Mr Winters said he “was not involved at all” in discussions over his pay, which was “a decision for the board”.
He added: “I think it’s quite appropriate for the board not to ask me to take a pay cut”, he added. “And they didn’t — I don’t think it ever occurred to them to ask.”