May 06, 2016

    Bonus cuts at Standard Chartered would 'risk staff exodus'


    STANDARD Chartered would risk a staff exodus if it slashed bonuses, chairman John Peace said on Wednesday, responding to investor anger over high pay when the bank's shares have tumbled and there will be no final dividend for 2015.

    At the annual shareholder meeting, he was asked by one shareholder why Standard Chartered's overall incentive pool had been trimmed only by a fifth in 2015 while dividend payouts fell 83 per cent and the bank reported a loss.

    "... all I can say is, if we were not to pay a bonus pool to junior staff and to managers who are highly marketable, we would not have a company," he said.

    Some prominent investors have said they will vote against the bank's new pay policies, joining a wider revolt among shareholders over soaring executive pay levels at a number of British companies, including BP.

    Royal London Asset Management has said it would vote against the 2015 remuneration report at Standard Chartered, criticising high pension policies which it said boost the level of pay unrelated to performance.

    In the event, investor protest was muted, with only 9.5 per cent of those who voted opposing the bank's 2015 pay report and only 5.5 per cent opposing the new pay policy.

    Standard Chartered reduced its bonus pool by 22 per cent in 2015 to US$855 million (S$1.2 billion).

    Its shares are down 48 per cent since June last year, when new chief executive Bill Winters took over with a mandate to repair the balance sheet and restore revenue growth.

    In February, the bank reported its first full-year annual loss in 26 years, hit by the costs of that restructuring and weaker commodities' prices.