Standard Chartered hit by pay revolt
BOSSES at Standard Chartered are planning peace talks with investors after rebelling shareholders came close to rejecting the directors’ pay policy yesterday.
At the bank’s AGM the vote on pay was opposed by 41 per cent of investors, evoking memories of the shareholder spring and putting pressure on chief executive Peter Sands to improve relationships.
The tight vote emphasises the fall from grace for the emerging markets specialist, which had been the toast of the City after looking as though it had come through the credit crunch stronger than ever.
Just 18 months ago the bank was celebrating its 10th consecutive year of record profits, in contrast to other UK-based lenders hit by the crash.
But six months ago it shocked the City with a profit warning, partly caused by the emerging markets slowdown, and yesterday reported another fall in profits.
Investors showed their frustration at feeling taken for granted. A major shareholder in the bank complained to City PM that the chair of the remuneration committee had not even been available to discuss pay.
Instead the bank sent other board members or officials in some instances, disappointing investors.
Another objected that the pay policies have been communicated poorly.
“Although we are pleased that all the votes on Standard Chartered’s executive remuneration have been passed, we are clearly concerned that a significant minority of shareholders voted against the bank’s new remuneration policy,” said a spokesman for the bank. “We acknowledge their views, will reflect on them, and continue our dialogue with our shareholders to address them properly.”
A strong majority backed a motion to allow bonuses of up to 200 per cent of salaries, the maximum allowed under the EU’s bonus cap rules.
The bank reported a high single digit percentage fall in profits, led by its troubled Korean arm. Shares rose 2.03 per cent, but are still down more than 20 per cent from this time last year.