Standard Life’s top two directors break £2m salary barrier

TWO of Standard Life’s top directors burst through the £2 million pay barrier last year, the Edinburgh-based life assurer’s annual report revealed on Monday.

Group chief executive David Nish’s total remuneration rose 3.6 per cent to £2.04m in 2011 from £1.97m the previous year, including a basic salary of £765,000 and an annual bonus of £1.04m. He also had a pension allowance of £222,000. Under the long term incentive plan he also gets 234,741 shares vesting on 20 April valued at last night’s price at £542,251.

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Keith Skeoch, boss of Standard Life’s asset management arm, saw his remuneration lift a shade under 7 per cent to £2m from £1 .87m in 2010. That included a basic salary of £425,000 and a bonus of £1.46m. The LTIP pays him £578,400.

The biggest percentage rise was for chief financial officer Jackie Hunt, whose total remuneration leapt 59 per cent to £1.22m from £766,000, including a £593,000 bonus. The increase reflected Hunt’s promotion to chief financial officer in May 2010. She gets £259,038 under the LTIP.

The annual report said: “As described last year, Jackie’s remuneration on appointment was increased, but set at a level below that of her predecessor and below the market range with the intention of moving to a more competitive level of remuneration as she became established in the role.

“This approach is consistent with how we treat employees who are promoted through the organisation.”

Hunt’s basic salary for the current financial year rises from £500,000 to £537,500. Base salaries for Nish and Skeoch remain the same.

Standard Life lifted annual operating profits 28 per cent to £544m last year, alongside a 6.2 per cent rise in the total dividend to 13.8p.

The group’s profits performance was higher than a City consensus expectation of £476m, although UK profits fell 6 per cent in 2011 to £220m in a tough trading climate. The asset management business boosted profits to £125m from £103m despite stock market volatility.

Crawford Gillies, chairman of Standard Life’s remuneration committee, said: “Our remuneration policy is aligned to the performance of individuals and of our business. Against a challenging economic environment, the company has continued to deliver growth in assets, an increase in operating profits and an increased dividend for our 1.5 million shareholders. I believe these awards are fair and reflect the continuing transformation of our business.”

The annual report said that, in line with the company’s annual bonus plan adopted in 2010, Nish and Skeoch were awarded bonuses last year based on 90 per cent group performance and 10 per cent personal performance. Hunt’s bonus was based on 80 per cent Standard’s group performance and 20 per cent her personal performance.

Despite the challenging backcloth for UK insurance, Nish said at the annual results last month that the UK remained “an exciting place to do business”.

He partly cited the strong commercial possibilities from the government’s introduction in the UK of auto-enrolment in pension schemes from next autumn.

The Scottish company, one of the biggest corporate pension providers with a market share of more than 20 per cent, has estimated that auto-enrolment could add 400,000 customers to the UK pension market within a few years.