The ISS authorized advisor asked investors to vote against Standard Chartered’s report and pay policy, and criticized the bank for not taking appropriate punitive action against the following top managers. UK record fines for regulatory reporting errors.
On Friday, the ISS said that “payoffs for performance concerns are high” after executives’ bonuses were slashed by what it deemed inadequate despite £46.5 million fines from Prudential Regulatory Authority in December.
The PRA censured the bank for repeatedly misreporting key liquidity metrics and for not being “open and cooperative” during its investigation.
“Remuneration decisions. . . The ISS said in a report. “They also do not fully utilize the available provisions to reduce the reward for recognizing failures in risk management, financial reporting and financial loss.”
“As for the findings of the PRAs, specific actions were taken on remuneration outcomes, recognizing the magnitude of the issue and following up with an internal review in 2019,” the bank said in a statement. An announcement.
The influential proxy advisor’s stance is a blow to the lender and Bill Winters, chief executive officer, ahead of StanChart’s annual meeting on May 4. He is now in his seventh year in charge. and prepare to embark on another strategic overhaul.
While the stock is up 17% so far this year, it’s down 49% since Winters took over in June 2015 and it trades at a discount of about 50% to its book value. assets, giving it a market capitalization of £20 billion.
As a result of the PRA penalty, StanChart executives suffered only 7 percentage points off their performance scorecard for 2021. As a result, they are considered to have hit 57% of their target, which equates to 1 £ ,4 billion bonus, 38%. higher than 2020.
The bank has proposed that Winters’ total salary be increased by 19% to £4.66m last year, while Andy Halford, chief financial officer, is given a 21% increase to £2.98m.
Close scrutiny of financial executives’ salaries is at a premium, especially in light of the cost-of-living crisis across Europe. Shareholders of UniCreditNatWest, Credit Suisse and Axa have also been urged to vote against management on various AGM proposals.
While offering “qualified support” for the re-election of StanChart president José Viñals, the ISS criticized him as the director ultimately responsible for standards at lenders and salary setting.
“The material governance flaws identified by the PRA and the resulting record fines were not adequately acknowledged in the annual report, nor were material disclosures disclosed,” the report said. to explain the company’s response to the PRA’s findings.
“The PRA’s enforcement action is not critical of Dr. Viñals,” the bank said. “Annual report dealing with PRA action. . . is appropriate. “
This isn’t StanChart’s first salary controversy in recent years. In 2019, winter is forced to accept a pay cut after nearly 40% of shareholders voted against his package. The issue revolved around the calculation of his £474,000 pension benefit, which did not follow standard industry practices.
The ISS’s latest report addresses the 2019 acquisition, saying it raises concerns about the “match between executive compensation and that of the broader workforce”.
