Standard Life chief executive David Nish saw the value of his pay package fall by more than £1.5 million last year as the life and pensions giant suffered a 13 per cent slide in annual profits.
The Edinburgh-based firm also revealed a drop in remuneration for Keith Skeoch, the head of its fund management arm, following a fall in the value of its long-term incentive plans.
The company’s annual report, published yesterday, showed Nish’s total remuneration was just over £4m for 2013, down from almost £5.6m the previous year, mainly due to the lower value of the group’s long-term incentive plans.
Standard Life Investments (SLI) chief Skeoch earned a total of £4.2m in pay and bonuses, compared with almost £4.9m in 2012.
Crawford Gillies, chairman of the remuneration committee, said the firm was set to implement a new long-term bonus scheme, which will run for five years rather than the current three. Executives will also be required to own more shares in the firm, and hold onto them for at least 12 months after leaving the company.
He said: “These proposals have been supported by a number of our institutional investors and will further strengthen the alignment of awards with the interests of our customers, shareholders and our focus on delivering sustainable business growth.”
Operating profits at Standard Life fell to £751m for 2013 – down from £867m the previous year, but ahead of City forecasts of £699m. The decline was blamed on lower one-off gains compared with 2012, when the bottom line was boosted by the sale of properties in Canada.
However, the results were overshadowed by Standard Life’s intervention in the independence debate, with Nish revealing the group was prepared to move some operations outside Scotland amid the uncertainty over which currency the country would use if voters opted to break away from the rest of the UK.
Funds under administration rose 12 per cent to £244.2 billion, in line with analysts’ predictions, helped by strong inflows into corporate pensions. Third-party assets under management at SLI were 17 per cent higher at £97.4bn.
Despite the drop in profits for 2013, Nish insisted the group was looking to the future with confidence, bolstered by its strong position in the workplace pensions market. The introduction of auto-enrolment, which compels employers to provide pension schemes for their staff, helped Standard Life secure 340,000 new customers in the past year.
Nish, who has headed the firm since the start of 2010, said: “Our UK business has been shaped and positioned to benefit from regulatory, market and demographic changes.
“We look forward to the future with confidence as we continue to capitalise on the strong distribution capabilities of our long-term savings businesses and our global investment expertise.”
The board proposed an 8 per cent rise in the final dividend to 10.58p, taking the full-year payout to 15.8p.
Shore Capital analyst Eamonn Flanagan said: “Standard Life reported a gentle outperformance against both our and the market’s expectations, reflecting strong growth in funds under management and fee revenue.
“There is no doubting the group’s credentials as an asset accumulator, highlighting the continuing success of SLI within the group.”
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