Shareholders at Standard Life Aberdeen have expressed their unrest at a proposed salary bump for the fund group’s incoming finance chief.
At the fund group’s AGM in Edinburgh on Tuesday 42% of its shareholders voted against its directors’ remuneration report.
The backlash surrounds the pay package for inbound CFO Stephanie Bruce who joins from PwC on 1 June to replace Aberdeen Asset Management stalwart Bill Rattray.
Under the terms of the deal Bruce will earn an annual salary of £525,000, which is 17% higher than the £450,000 netted by her predecessor Rattray who had been with Aberdeen Asset Management, which merged with Standard Life Investments, for nearly three decades.
Bruce will also be entitled to a bonus of up to 350% of her basic wage and a one-time bonus of £750,000 worth of shares.
Despite dissatisfaction over her pay, investors overwhelmingly approved Bruce’s appointment to CFO with only 1.3% voting against it.
Responding to the controversy over Bruce’s pay SLA said it “recognises the significant percentage of votes cast against this resolution” but defended the decision which it said followed “extensive discussion” with the remuneration committee and its advisers.
“Stephanie Bruce is an outstanding addition to our executive team at Standard Life Aberdeen, as our shareholders have acknowledged in their overwhelming endorsement of her appointment as CFO.
“The reason we made this award, was to allow us to attract a talented senior executive from outside of the investment management industry who was previously remunerated on a comparatively consistent annual reward package, without the significant deferral arrangements we apply.”
The FTSE 100 asset manager added it would “continue to engage with shareholders on the concerns raised on this resolution”.
Concerns about executive pay at the firm have grown more acute as SLA funds have continued haemorrhaging cash. Last year the firm saw a massive £40.9bn worth of outflows, up from £32.9bn the year prior, raising more questions as to the rationale for the merger in the first place.
Meanwhile the firm’s share price has continued to remain depressed, losing halve of its value last year.
Earlier this year SLA decided to drop its co-CEO structure, marking the end of an era for Aberdeen boss Martin Gilbert who agreed to step back from the helm and let Standard Life’s Keith Skeoch run the business solo.
