Prudential boss Tidjane Thiam awarded £7.8m pay package days after watchdog censure
Friday 05 April 2013
Prudential boss Tidjane Thiam was today handed a £7.8 million pay package by the insurer, just days after he received an embarrassing censure from the Financial Services Authority.
Thiam will receive a £2 million bonus and long-term incentives worth about £4.4 million on top of his £1 million annual salary and other benefits. This compares to £4.7 million in 2011.
Overall, Prudential paid its seven executive directors a combined £33.4 million last year.
The generous pay packages are likely to raise eyebrows across the Square Mile coming so soon after the FSA rebuke. They could also be contested at the group’s AGM next month in London.
Last week, Thiam became the first FTSE 100 chief executive to be censured by the watchdog. The FSA said Prudential failed to tell it that it planned to launch a $35.5 billion (£23.4 billion) bid for Asian rival AIA.
Along with the censure, the Pru was fined £30 million because it “failed to deal with the FSA in an open and co-operative manner”.
At the time, Tracey McDermott, the FSA’s director of enforcement and financial crime, said: “That was a serious error of judgment for which Prudential is paying the price.
“This case should send a clear message to all board members of their collective and individual responsibility for the decisions they make on behalf of their companies.”
Sources close to Prudential’s said 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%.
In 2012, the insurer saw pre-tax profits rise 54% to £2.8 billion with operating profits in its landmark Asian business up 26% to £988 million. This helped the company pay a full-year dividend of 29.19p, compared to 25.19p in 2011.
Thiam will receive 70% of the £7.8 million package in shares.
His award comes in the same week as Standard Life chief executive David Nish was handed a £5 million pay package. Keith Skeoch, head of Standard Life’s fund management arm, also enjoyed long-term incentives of £2.27 million taking his pay to £2.6 million.
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