Ex-Standard Life boss Lumsden took home £1m

Standard Life, the insurer that is having to increase charges and slash payouts to customers while it battles to meet new solvency rules, yesterday revealed that its former chief executive earned nearly £1m in salary and bonuses last year.

Iain Lumsden announced his sudden and immediate retirement in January, two years ahead of schedule, after Standard Life revealed it would have to raise reserves and consider abandoning its pledge to mutuality.

Mr Lumsden had been chief executive for only 22 months and was a staunch champion of Standard's mutual structure. Under his leadership, the company lost billions of pounds on overinvestment on the stock market. The company's latest annual report shows Mr Lumsden received £705,000 in basic salary and performance-related bonuses in 2003. He was also awarded £234,000 of long-term bonuses and will receive an annual pension of £339,000.

The payouts have angered policyholders, still reeling from the revelations that their policy charges will go up to meet the cost of guarantees offered to them by Standard and byrounds of bonus cuts. "The management has done nothing to merit great rewards," Ronnie Sloan, a policyholder and critic of Standard's management, said.