Martin Gilbert pay tops £5m as AAM reap rewards

Aberdeen Asset Management's Martin Gilbert. Picture: Neil Hanna

Although his £500,000 basic salary is modest in comparison to that of other FTSE 100 chief executives, a £4.6m bonus took his total to £5.1m, up from £4.5m last year.

The latest award means in the past three years Gilbert has seen his pay total more than £14m from the firm he co-founded in 1983.

But Gilbert wasn’t the only £5m-plus director on Aberdeen’s board this year, with Hugo Young, who heads up the group’s Asian operations, receiving just £5,000 less than Gilbert.

Anne Richards, chief investment officer, received a £1.9m bonus as part of a total package of £2.3m compared to £2.1m last year.

The three other executive directors at the company, which recently unveiled a deal to buy Scottish Widows Investment Partnership (Swip) from Lloyds Banking Group, each received packages of over £1m.

In total, boardroom pay for the year to 30 September was £16.9m, up from £14.1m. Bonuses paid to directors are 75 per cent in Aberdeen shares and are payable over a four-year period.

In his report to shareholders, Simon Troughton, chairman of the remuneration committee, said bonuses for executive directors are based on a “rounded assessment of group and personal performance”.

Factors taken into account include investment performance for clients, earnings per share growth and client retention.

Troughton said his committee had “monitored the debate” in the financial services sector over the capping of variable compensation and was aware that some investors favoured the setting of a maximum. But he said the committee’s policy was to set a maximum level of bonus pool for a year rather than a limit on individual awards. The directors, along with all staff, share bonuses from a pool capped at no more than 25 per cent of operating profits. “We believe that this policy ensures Aberdeen is not placed at a market disadvantage when competing for talent when the majority of our peers do not have such a cap.”

He said the company’s pay philosophy was focused on “pay for performance, tempered by an emphasis on ensuring that performance is not achieved by taking risks which fall outwith the board’s risk appetite”.

Following two consecutive years when there has been no increases in basic salaries for executive directors, they will receive an increase of approximately 1 per cent from January – below the average increases awarded to staff.

During the year Aberdeen delivered a 39 per cent rise in underlying pre-tax profits to £482.7m on a 24 per cent rise in revenue to £1.08 billion. Shares in the company have risen by around a third over the past 12 months.

Gilbert recently sold £8.6m worth of shares with other directors also selling more than £10m between them.

Last month Gilbert, left, yesterday signalled big plans for Edinburgh after acquiring Swip to create a European powerhouse.

The addition of £136bn of assets from Swip will take the total to £336bn, making it the continent’s biggest independently listed fund manager.