Standard Life to ballot members on directors' pay

STANDARD Life’s 2.3 million members are being given the chance to vote against the remuneration of the mutual’s boardroom for the first time.

Ballot papers for its annual meeting - on 6 April in Edinburgh - are to be posted on the assurer’s website in the next 48 hours, a spokesman said yesterday. In an unprecedented move, the forms will allow members to voice their feelings about the 2.4 million shared by the group’s board in 2003.

With-profits policyholders have seen their bonuses cut five times in the past two years - the latest cut came in January.

Standard Life revealed last Friday that its former chief executive, Iain Lumsden, received a pay package, excluding pension contributions, worth about 1m in 2003. His final-year remuneration rose 12 per cent from 2002, and included a performance-related bonus of 125,000.

Gordon Arthur, head of corporate affairs for the group, said yesterday: "By law, all plcs are required to have a vote among shareholders about their board’s remuneration. We have chosen to follow that example because we believe it is good corporate governance to do so.

"It is a voluntary decision [by Standard Life] and we hope people will recognise that."

Crucially, the vote will not be binding, but it will provide a closely-watched insight into how Standard Life investors feel the management of the group is performing. It comes amid a wholesale review of the mutual’s future under chief executive Sandy Crombie.

Arthur said annual meeting "packs" will be sent out to policyholders towards the end of this week. They will include a summary of the report produced by Standard Life’s remuneration committee, justifying the payouts awarded to the 13 directors on its board.

"We can’t be sure how members will vote, and we’re not trying to prejudge it," Arthur said. "But let’s not confuse seven or eight people who might stand up at the AGM, or someone like [independent financial advisor] Ronnie Sloan or [carpetbagger] David Stonebanks, who have their own personal agenda, and how our members actually feel.

"Look at how our members voted last year on the re-appointment of directors. About 94 or 95 per cent of the votes were in favour of re-election." He added the packs would explain how the group performed in 2003.