Former Pru chief receives pounds 1.3m

Click to follow
JIM SUTCLIFFE, the former chief executive of Prudential's UK operations, received more than pounds 1.3m in pay and benefits in his final year - despite presiding over "deep-seated and long-standing management failures" in the pension mis-selling area.

Prudential yesterday revealed that Mr Sutcliffe, who resigned in September after a sharp disagreement with group chief executive, Sir Peter Davis, was paid pounds 359,000 in salary, bonus and benefits. He realised pounds 539,000 by exercising share options and received a share award worth pounds 98,000.

Prudential paid Mr Sutcliffe a further pounds 343,000 in compensation for loss of office, making pounds 1,339,000. It also paid an unspecified amount to top up his pension, entitling him to pounds 101,000 a year if he retires at 60.

The Pru, Britain's largest insurance company, was severely criticised twice last year by City regulators for falling substantially below the standards expected of a regulated firm, mainly for failures in compensating victims of pension mis-selling.

Mr Sutcliffe was chief executive of Prudential's UK operations at the time when the Financial Services Authority said the company failed to remedy grave defects in the operation of its sales force, which it had already been warned about.

Among other failings, the company overlooked 8,000 victims of mis-selling because they had retired or died since the Pru was first asked to review their cases, in 1994.

In December, the FSA attacked the Pru for a "cultural disposition against compliance [with the Financial Services Act] which filtered through Prudential's branch offices, their managers and advisers". The company's management had failed to put in place proper controls to protect investors, the FSA said.

Mr Sutcliffe was paid more than the Pru's group chief executive. Sir Peter's pay rose last year to pounds 655m from pounds 621m. The Pru also made pension contributions worth more than pounds 139,000 on Sir Peter's behalf.