Standard Chartered Plc investors should vote against the bank’s executive pay report because it doesn’t disclose long-term bonus targets and Chairman John Peace helps set compensation, according to corporate governance adviser Pensions Investment Research Consultants Ltd.
The remuneration committee, of which Peace is a member, gave him about $769,000 of share awards, London-based PIRC, which advises investors with total assets of about 1.5 trillion pounds ($2.4 trillion), said in a statement today.
Standard Chartered, Britain’s No.2 bank by market value, paid Mike Rees, head of corporate banking, as much as $13.4 million for 2011, while the bank’s five highest-paid employees got $42.1 million for 2011, according to its annual report. The PIRC advice comes after 27 percent of shareholders last week voted against the pay report of Barclays Plc, the U.K.’s second-largest bank by assets.
“The lack of cap for the annual bonus raises concerns over the quantum of awards being provided to individual directors,” PIRC said in the statement. Rees may receive a $10 million annual performance bonus, including cash, shares and deferred shares, “nearly nine times” his base salary of $1.12 million, said PIRC.
“We’ve delivered nine years of record income and profit, so there’s clearly evidence of long-term performance within the bank,” bank spokesman Jon Tracey said by phone. “Pay and compensation is absolutely geared very stringently to long-term performance objectives within Standard Chartered.”
The bank adheres to the U.K. corporate governance code relating to Peace, Tracey said.
-- Editors: Jon Menon, Keith Campbell