Prudential Plc (PRU), the U.K.’s biggest insurer by market value, paid Michael McLintock, head of fund unit M&G, 7.6 million pounds ($12.2 million) last year, 60 percent more than Chief Executive Officer Tidjane Thiam.
McLintock will receive 6 million pounds in long-term incentive pay in addition to 1.6 million pounds in salary and bonuses, Prudential said in its annual report published today. Thiam received 4.7 million pounds in base pay, bonuses and long- term incentives, 3 percent less than in 2010.
Prudential is rewarding McLintock after M&G grew to be the U.K.’s second-biggest retail fund manager, up from fifth-largest four years ago, as investors flocked to its bond funds in the aftermath of the financial crisis. M&G’s funds under management grew 2 percent to 201 billion pounds even as the MSCI World Index dropped 7.6 percent in the year.
“Michael McLintock’s remuneration is structured in line with market practice in the fund-management industry,” Prudential said in an e-mailed statement. “M&G has had three very successful years. It has been number one in net flows for 13 consecutive quarters and between 2009 and 2011, M&G’s profit grew by 103 percent.”
Schroders Plc (SDR), the fourth-largest U.K. fund manager by assets under management, paid CEO Michael Dobson 3.1 million pounds in 2011, 10 percent less than the previous year. The firm’s assets under management dropped 4.7 percent to 187.3 billion pounds, according to its annual report.
McLintock’s pay, which was 40 percent more than the 5.4 million pounds he received in 2010, helped almost double the aggregate remuneration for all of Prudential’s executive directors in 2011. As U.S. CEO Mike Wells and Chief Risk Officer John Foley were added to that board, the executives were paid 29.8 million pounds last year, compared with 16.5 million pounds in 2010.
Prudential, which has threatened to quit the U.K. due to new European solvency rules, is “on track” to meet its self- imposed targets to double 2009 operating profit by next year and make its Asian unit able to fund itself, Thiam said on March 13. The company currently invests its U.K. profits in Asia, where it gets about 40 percent of its revenue.
The insurer’s operating profit rose 7 percent to 2.07 billion pounds in the 12 months to Dec. 31, boosted by profit in Asia and surpassing the 2.02 billion-pound median estimate of 13 analysts surveyed by Bloomberg.
The stock declined 4.4 percent in 2011, less than the FTSE ASX Life Insurance Index (FALIFE), which dropped 4.8 percent.
“Over the past three years Prudential has delivered almost 1.7 times the total shareholder return generated by its comparator group of large U.K. and international insurers,” the company said. “Executive directors’ share awards are directly linked to that performance.”
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