Margetts: No pay boost for top L&G staff
LEGAL & General (L&G) chairman Sir Rob Margetts yesterday said no staff at the firm earning over £100,000 received a payrise last year and confirmed all directors waived their bonuses, as he faced shareholders at the group’s annual meeting.
He said it “would be inappropriate to make those payments when the company is reducing headcount and your returns are being reduced”, drawing cheers from investors.
The chairman issued a veiled attack on rival firms that have defied the tide of anti-bonus sentiment during the recession and maintained remuneration policies, stating: “We see ourselves as different to others in the City.”
Shareholders voted resoundingly in favour of the remuneration policy at the meeting, and confirmed their approval of the firm’s decision earlier this year to slash dividends to shore up capital, in the face of possible contagion from the stricken banking sector during the downturn.
But Margetts faced dissent over the board’s decision to continue its costly programme of share buybacks, with one irate shareholder describing the action as short-termist and the “fiscal equivalent to cocaine”.
Under 95 per cent of shareholders voted “yes” to the plan’s continuation at the largely cordial meeting, even though all other resolutions were less than two per cent opposed.
Margetts said shareholders had voted to initiate the strategy at previous meetings and said it made sense in the long term.
The chairman refused to comment on speculation he had to go back to the drawing board to find a new heir to his role after his first choice, Sir James Crosby, became a whistleblower at failed bank HBOS.
Margetts said an active recruitment process is ongoing and a replacement would be named in due course, adding: “You’ve got me for now.”
And the chairman defended the firm’s decision to avoid adopting Market Consistent Embedded Value (MCEV), a voluntary accounting standard being adopted in Europe, stating it actually encourages cyclicality.
He added the firm “remains financially strong”.