David Prosser: The man from the Pru enjoys an undeservedly generous payday


Outlook Here are two numbers for you: £377m and £50,000. The first number is the cost to Prudential, as detailed in its annual report yesterday, of its failed bid for AIA, the Asian insurance company. The second figure, also taken from Pru's report, is the amount of bonus the insurer's chief executive, Tidjane Thiam, missed out on at the end of 2010. Despite presiding over the AIA botch, Mr Thiam collected a bonus of £1.57m, 97 per cent of the £1.62m that was the maximum he could have theoretically earned.

As reversals of fortunes go, this one is impressive. Last spring Mr Thiam came within a whisker of losing his job. Several shareholders called for his resignation following the AIA debacle, which saw Prudential forced to withdraw from the deal because of an investor revolt and a regulatory roadblock it hadn't noticed being built. Six months later, Pru's remuneration committee decided Mr Thiam was due all of his bonus other than – relatively speaking – some small change.

No wonder people take such a cynical view about the leaders of Britain's biggest businesses – and not just at the banks. This bonus is shameless in its reckless disregard for accountability or responsibility. In the bulging folder of stories about rewards for failure in the boardroom, Mr Thiam's pay deal will take its place close to the top.

Let us be fair and present the case for the defence. It is that aside from the AIA misadventure, Pru's performance was impressive: better-than-expected profits enabled it to raise its dividend by 20 per cent. Also, Mr Thiam has decided to take his whole bonus in shares rather than cash (normally, it would be half and half) with the award being deferred for three years. This is intended to underline Mr Thiam's commitment to the company.

Hmm. If Prudential was doing so well, even in Asia itself, why did its chief executive feel the need to bid for AIA in the first place? As for the deferred bonus, Mr Thiam will know that any company seeking to test his loyalty to Pru would be certain to offer him compensation for any payment foregone were he to jump ship. Sure, he'll have to wait a bit longer for his bonus now (and risk a share price setback) but there's no question of him not receiving the money.

Mr Thiam has not always shown the best judgement. In the run up to the AIA deal, he had to back out of an agreement that would have seen him take up a non-executive directorship at Société Générale. Shareholders understandably felt their chief executive, who had been in the job just six months at the time, had enough on his plate.

Accepting this award looks like another miscalculation. Dividend hike notwithstanding, Prudential's shareholders should say as much when they vote on the company's remuneration report at next month's AGM.

Start your day with The Independent, sign up for daily news emails
News
people
News
A survey carried out by Sainsbury's Finance found 20% of new university students have never washed their own clothes, while 14% cannot even boil an egg
science...and the results are not as pointless as that sounds
News
Dominique Alderweireld, also known as Dodo de Saumure, is the owner of a string of brothels in Belgium
newsPhilip Sweeney gets the inside track on France's trial of the year
News
Cumberbatch was speaking on US television when he made the comment (Getty)
people
PROMOTED VIDEO
Life and Style
tech
Arts and Entertainment
Tom DeLonge, Travis Barker and Mark Hoppus of Blink-182 pictured in 2011.
musicBassist Mark Hoppus and drummer Travis Barker say Tom Delonge is 'disrespectful and ungrateful'
Sport
football
Arts and Entertainment
Olivia Colman and David Tennant star in 'Broadchurch'
tvBroadchurch series 2, episode 4, review - contains spoilers
Sport
cyclingDisgraced cycling star says people will soon forgive his actions
News
Britain's Prince Philip attends a Garden Party at Buckingham Palace in London
people
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Ed Sheeran will play three sell-out gigs at Wembley Stadium in July
music
News
i100
News
Lena Dunham posing for an official portrait at Sundance 2015
people
Arts and Entertainment
Under the skin: Sarah Kane in May 1998
theatreThe story behind a new season of Sarah Kane plays
Arts and Entertainment
Preening: Johnny Depp in 'Mortdecai'
filmMortdecai becomes actor's fifth consecutive box office bomb
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Day In a Page

Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

Auschwitz liberation 70th anniversary

Woman sent to three Nazi death camps describes surviving gas chamber
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea