Policyholders to attack £2m bonus package for Standard Life directors

Standard Life will become the latest company to come under attack over executive pay today, with irate policyholders set to attack the multimillion-pound bonus payouts to its directors.

The directors of Europe's biggest mutual insurer will come under fire for receiving bonuses totalling nearly £2m for 2002 – a year that saw payouts for with-profits policyholders slashed by an average 15 per cent. In particular, Iain Lumsden, chief executive, will be in the spotlight over his "performance-related" bonus of £136,000, despite helping to clock up a £4.7bn loss for the company on the stock market. Standard's annual meeting will also be the stage for phase one of the latest attempt to convert it into a public company. David Stonebanks, a retired lecturer, will use the event to canvass support for a new demutualisation campaign, which he kicked off in January.

Mr Stonebanks has had pledges of support from 1,600 of Standard's 2.3 million members through his dedicated demutualisation website. He hopes to use theEdinburgh meeting to increase that number although he must wait until July to call an extraordinary meeting when the three-year time restriction between demutualisation bids runs out.

Standard's AGM will differ from that of publicly quoted companies in that its policyholders will not be able to vote on the remuneration packages awarded to its directors. But they will be able to voice their dismay at the 20 per cent rise in the pay of the insurer's top executives. "The meeting will be a forum for policyholders to put questions to the chief executive and members of the board," a spokeswoman said.

Policyholders are expected to ask Mr Lumsden to justify an estimated £1.5m allocated to fund his company pension during 2002, a move that boosted his retirement entitlements by more than 40 per cent. Mr Lumsden was paid £619,000 in basic salary, benefits and a performance-related bonus last year. He was also paid £124,000 as part of a three-year incentive scheme granted in 1998.

The meeting will be the first public outing for Standard's chairman-elect, Sir Brian Stewart, since he was named as John Trott's successor earlier this month. Sir Brian, who is not due to take over until June, is one of four non-executives up for re-election. The others are David Newlands, Hugh Stevenson and Jean-Claude Delorme.

Although Standard suffered heavily due to its exposure to equities last year, strong new business growth made it the biggest life and pensions provider in the UK. In its annual report and accounts, which members will be asked to approve today, Standard also warned policyholders to expect lower returns in the future.

Standard's meeting will set the ball rolling for a week of stormy clashes between companies and shareholders upset by large payouts to directors.

BG Group, the oil and gas exploration company, will today face a revolt led by the National Association of Pension Funds over the re-election of two directors – its chairman, Sir Richard Giordano, and David Benson, a long-standing non-executive – on remuneration grounds.

Schroders tomorrow will be quizzed about the guaranteed £1.8m annual bonuses its chief executive, Michael Dobson, is entitled to, while Barclays on Thursday will be forced to defend the £4m severance package for Matt Barrett, its chief executive.

Shell, the oil major that faces its shareholders tomorrow, will face criticism over pay packages for directors and over its environmental record. BP can expect a similar grilling on Thursday, particularly over the environmental impact of its proposed oil pipeline from Baku to Ceyhan.