Simon English: Cute, cosy world of the mutual? No, it's still loony land

To click on the Royal London website is to enter a cosy world, one that could induce a warm glow of something like hope.

"Mutual insurers have no shareholders to pay," it purrs, "so they can ensure their profits are only distributed amongst their members, or reinvested to give better returns, better value, and higher levels of service."

More than that, "Our guiding principle was established over coffee 150 years ago. And it still holds good today." In 1861, Henry Ridge and Joseph Degge met in an unnamed shop with a view to making the world a fairer place. "Maybe it was the stimulus of the caffeine they consumed, but they came up with the idea of launching a friendly society dedicated to helping people save for their financial security," says our guide.

It's cute, isn't it?

If you can bear to leave this charming place and trudge over to the annual report and accounts, you run straight into loony corporate land. A place where nonsense words must be used lest the plain facts are allowed to speak for themselves.

The group remuneration policies offer all the usual company absurdities to disguise what would otherwise be seen as simple transfers of wealth from customers to managers.

There are no shareholders, remember, so why should there be a "shadow share plan", a "long-term relative incentive plan" or – get this – a "phantom share option plan".

The shares herein described are indeed phantom, the money that slaps into executive bank accounts, entirely real. One of the defences offered by mutual organisations whenever their pay policies are questioned is that they have to pay salaries that compete with those at public companies, or else they will lose their best people.

Which rather gives the game away that there is no expectation the top brass should buy into the mutuality lark – that's just soft soap for the customers.

Mr Ridge and Mr Degge might have said that such executives are perfectly entitled to try their luck elsewhere, but fat-cattery wouldn't be tolerated. Royal London members might want to say the same.