Schroders chief executive Peter Harrison has responded to controversy over his £2.5m pay increase announced in the midst of the coronavirus lockdown while the asset manager was urging companies to keep executive pay under control.
In April, Schroders announced it would pay Harrison (pictured) up to £9m for the current financial year, a 39% increase on the £6.48m he took home in 2019. Until April, he had also been chair of the Investment Association, which was also urging companies to exercise restraint on executive pay.
The remuneration report, which includes a three-tier potential salary band, was signed off at the start of March. It is possible Harrison won’t receive the maximum £9m pay. Shareholders approved the remuneration package at the AGM at the end of April.
In an interview with The Times, Harrison said: “In hindsight, I wish it had been different, because the point is a really important one,” he told the newspaper from his second home in Cornwall. “I’ve taken the very public view that we will not make any staff redundant, we won’t furlough anybody, we won’t accept [government] aid.”
The Investment Association had linked its comments about executive pay to those companies that had slashed dividends.
He has since paid £631,000 to the coronavirus relief effort.
> See also: What is the right way to approach executive pay during the coronavirus crisis?
Harrison also addressed other issues that have ruffled shareholder feathers.
Last year, Leonie Schroder, who does not have any financial services experience, was appointed to the board to replace her late father Bruno Schroder.
“I have to say, since she’s joined the board, she’s made a huge contribution — she really understands the importance of people and purpose,” Harrison said of the appointment.
“She’s very open to a modern business that understands all its stakeholders, which is what you really want from one of your shareholders.”
He denied the Schroder family has any plans to sell its 48% stake in the asset management giant.
Harrison also defended the promotion of his predecessor, Michael Dobson, to chairman, which goes against the corporate governance code.
“We’ve justified very clearly that Mike was going to let me get on with running the business,” he said.
Harrison was promoted to chief executive in 2016, having joined from RWC in 2013 to become head of equities.
