Pru faces revolt over bonuses after FSA rebuke
Saturday 06 April 2013
Pressure is mounting on Prudential to review its executive pay awards following an embarrassing reprimand from the Financial Services Authority last week.
Prudential's chief executive, Tidjane Thiam, was yesterday handed a £7.8m pay package by the insurer just days after he became the first FTSE 100 chief executive to be censured by the watchdog.
Mr Thiam will receive a £2m bonus and long-term incentives worth £4.4m on top of his £1m annual salary and other benefits. This compares to £4.7m in 2011.
Overall, Prudential paid its seven executive directors a combined £33.4m last year.
The generous pay packages are likely to raise eyebrows across the Square Mile coming so soon after the FSA rebuke. They could be contested at the group's AGM next month in London.
Last week, the FSA said that Prudential had failed to tell it that it planned to launch a $35.5bn (£23.4bn) bid for Asian rival AIA. Along with the censure, the Pru was fined £30m because it "failed to deal with the FSA in an open and co-operative manner".
A spokesman for the shareholder advisory group Pirc told The Independent: "Given the FSA's recent intervention, this obviously raises a question about awards to the chief executive.
"The company is the victim here, but it has had to pay the fine. Therefore we would encourage the remuneration committee to look at whether there are grounds for clawing back awards. It would be unusual if no financial penalty was incurred, given the fine and personal criticism."
Sources close to Prudential said Mr Thiam's pay reflects the company's strong performance over the past few years. Since scrapping the AIA deal in June 2010 the insurer's share price has risen by 86 per cent.
In 2012, the insurer saw pre-tax profits rise 54 per cent to £2.8bn, with operating profits in its landmark Asian business up 26 per cent to £988m. This helped the company to pay a full-year dividend of 29.19p, compared to 25.19p in 2011.
Mr Thiam will receive 70 per cent of the £7.8m package in shares.
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