Policyholders vent fury at Standard Life chiefs

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The Independent Online

Policyholders of Standard Life, the insurer that abandoned its pledge to mutuality in a dramatic about-turn earlier this year, yesterday staged a massive backlash against the board of the company, as 43 per cent of them voted against bumper pay awards to directors.

Policyholders of Standard Life, the insurer that abandoned its pledge to mutuality in a dramatic about-turn earlier this year, yesterday staged a massive backlash against the board of the company, as 43 per cent of them voted against bumper pay awards to directors.

The vote marks one of the biggest revolts on director pay awards in corporate history, after nearly 1,200 policyholders packed out Edinburgh's International Conference Centre for the company's annual general meeting.

Policyholders called directors "an absolute disgrace" for enjoying rising bonuses while losing billions of policyholder funds on the stock market over the past four years. Policy- holders are now facing bonus cuts and shortfalls on their endowment mortgages.

But Sandy Crombie, who took over as chief executive of Standard in January after the abrupt resignation of Iain Lumsden, was paid £603,000 last year, up from £520,000. On top of this he received a £140,000 cash bonus and saw his pension rise by £866,000. Mr Lumsden received £705,000 in salary, a £192,000 bonus and a rise in his pension fund of £748,000.

Efforts to justify pay awards from a visibly flustered Sir Brian Stewart, the chairman, met with little favour with the attendees. Freddie Lawson, a policyholder, said: "Mutuality is supposed to be about sharing, but it seems the directors don't want to share when times are bad. Nobody could complain about rewards for good results, but when there are poor results, it is an absolute disgrace."

There were calls for Mr Crombie to stand down and repeated requests for the directors to hand back the awards they had been given for 2003 to policyholders.

Earlier this year, the board revealed it was in crisis talks with the City regulator over new solvency requirements that forced it account for its liabilities more stringently. It has since had to slash payouts to customers about 20 per cent, hiked charges, dump £7.5bn of equities and is now proposing demutualisation.

Many of the policyholders had been present at the company's AGM in 2000 when the then board beat off a demutualisation campaign.

There were calls for the non-executive directors who were on the board in 2000 to step down, as they had "presided over a massive destruction in the company's value".

The three non-executives who were up for re-election each had a sizeable vote against them, of more than 30 per cent in all cases.

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