Insurer faces fat-cat storm over £4m goodbye to boss
Mike Yardley quits Royal London but will still get paid over three years as 'incentive' schemes vest
Monday 30 April 2012
One of Britain's top insurers risks being dragged into the row over fat-cat pay today after it emerged that its former chief executive is to receive a "golden goodbye" worth £4m.
Mike Yardley quit Royal London, the UK's biggest mutual insurer, last September after 13 years at the helm. The annual report, posted on the company website at the weekend, shows Mr Yardley will receive the millions over the next three years as "incentive" schemes vest.
Asked why he would need to be incentivised now he has left, Royal London replied: "The performance-related awards reflect the strong operating performance of Royal London over a number of years. The long-term scheme, in particular, is designed to be well-aligned with the long-term interests of members and other policyholders. A substantial part of the performance-related awards were earned, and reported, in previous years but are only now becoming payable."
Royal London has been around more than 150 years, lately expanding with takeover of venerable insurance-industry names such as Scottish Life and Scottish Provident. It brags that since it has no shareholders, all profits are distributed to the more than four million members. At least some of those members are now likely to voice objections at the annual meeting in London next month .
The £4m for Mr Yardley is on top of the £1.1m he was paid for the nine months he worked last year. When he turns 60 in 2017, he will be eligible for a pension worth close to £450,000 a year.
Members may feel they have not done so well. Customers who paid £200 a month into a Royal London pension over the last 20 years will receive a pot of less than £90,000. At present annuity rates, that would buy an annual pension of £9,000 or less.
The annual report also reveals that new chief executive Phil Loney got a "golden hello" deal of £1.28m, supposedly in compensation for having left Lloyds Banking Group. The revelations come days after Barclays was rocked by a near-unprecedented revolt from investors over executive pay.
Royal London's remuneration committee is led by David Williams. The other members are Duncan Fergsuon, Robert Jeens, Tim Melville-Ross and Andrew Palmer. The committee took "advice" on pay from Kepler Associates, Pinsent Masons, Towers Watson and PriceWaterhouse Coopers, notes the annual report.
Ferguson, Jeens and Palmer are paid about £60,000 as non-executive directors. Chairman Tim Melville-Ross received £198,000. Royal London's own trade body, the Association of British Insurers, has lately been getting active on executive pay.
ABI boss Otto Thoresen says there needs to be "a clear alilgnment of boardroom reward with long-term sustainable growth of the economic value of the company".
- 1 Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
- 2 Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
- 3 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 4 Free U2 album: How the most generous giveaway in music history turned PR disaster
- 5 Scotland could still declare independence – even without referendum, says Alex Salmond
Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
Tesco in crisis: UK managing director among four executives suspended after exposure of accounting scandal
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
Alicia Keys leaks own nude photo 'to create a kinder and more peaceful world'
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...