James Moore: Standard Life's good at feathering its nest but should stop throwing stones
If we could just make our report a bit more like yours it might make life easier for myself
Dear Gerry Grimstone, First of all, congratulations. I have to say I have just finished reading Standard Life's annual report (I kept my shares after the company demutualised) and, well, your remuneration committee has done a truly sterling job.
That being the case, I wonder if I could ask you a couple of favours?
First of all, let me explain our situation. My company has many similar issues to yours. We made good money last year. Profits were up (although let's be honest here, a couple of years after the financial crisis they really ought to have been) but our share price hasn't really done the business when you compare it with the FTSE 100.
I keep getting told that the City is, well, a little sceptical about our CEO's strategy and his ability to keep up the earnings growth over the medium to long term. I expect you've been hearing similar things.
Despite this I felt it was important to ensure that our executives were handed all the bells and whistles. Just as yours were. I mean, if you were to give an inch to those grubby retail shareholders who turn up to AGMs and ask awkward questions they'd never shut up. And as for those awful media types who keep banging on about excessive pay, need I say more? We simply have to hold the line.
Which brings me to your annual report, and especially your remuneration report. Saints be praised! You've presented it in such a way that most of your critics will probably give up long before they get to that annoying little graph showing your share price against the FTSE 100.
Is there a degree in obfuscation at any of the Scottish universities? You should sponsor a chair. Or at least a few bursaries. I say this because I think it would be a thoroughly good idea to foster talent so you can eventually replace the writer of your report.
What talent that writer has! To stretch even an orgy of self justification to 17 pages takes some skill (that's quite a few trees that will have cause to regret your writer's existence, btw!!!!!)
So to the favours: I don't suppose there is any chance we could borrow him or her? We'd pay for their time, generously too. Not as much as the £35,700 that Northern Foods paid your CEO David Nish for four months' – sorry a couple of days during four months – work last year. But I assume the writer is not an executive, so you won't have to let them keep money!
I really would be most grateful if you could help us out with this. We're under a lot of pressure over our executives' long-term incentive plans. A lot of investors think that they are overly generous and I'm worried that this is because we actually came clean about them in the last annual report. Made them easy to understand. Foolish, I know. But its ages since we've had an award of any kind and the Plain English Campaign promised.
You see, our pay policy is actually based on yours. What's more, the chap who runs our most important subsidiary has his own special bonus scheme based on its performance on top of the group scheme. That is almost the same as the one you've given your investment chief, Keith Skeoch.
Unfortunately we're now getting all sorts of flak from our shareholders. If we could just make our report a bit more like yours it might make life easier for myself and my colleagues. Which brings me to the second favour. Standard Life is one of those shareholders I mentioned. We've even had to put up with one of your chaps on the Today Programme banging on about how unjustified our rewards are.
So please, could you ask your people to stop throwing stones at us from their glass houses?
AN Other PLC
Bankers did not deserve this gallant Knight
Would it be overegging it to say Angela Knight's planned departure from the British Bankers' Association is one of the most serious blows the industry has suffered since the financial crisis?
The economy is still struggling and the regulators continue to sharpen their knives, especially in Europe. Either one of those could still knock out several of the banks' teeth. All the same, the loss of Ms Knight will still come as quite a body blow.
As the financial crisis took hold she became the public face of one of the most reviled industries in Britain. Her employers, the richly rewarded chief executives of Britain's biggest financial institutions, acted like small children the world over by hiding behind her coat-tails while she was trotted out to defend them in front of some of the media's most ferocious interrogators. All too often she was actually defending the indefensible.
And yet, while she may have occasionally been bloodied, she remains to this day unbowed.
What is more, despite the brickbats that were thrown at her she managed to remain unfailingly cheerful, making herself available to her often hostile questioners at any time they cared to chose. And still managing to smile about it all afterwards. Other bosses of trade associations take note.
It helps that she has always had a thick skin, acquired as a Tory on Sheffield city council and honed as a junior Treasury minister during the dog days of John Major's woeful administration.
Ms Knight deserves a break. After the shellacking she has taken over the past few years, she also deserves a few cosy non-executive directorships far more than most of the occupants of those sort of positions. She would do a better job too.
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