Over 40% of Standard Life policyholiders last week voted against the remuneration packages proposed for its directors after the company told them that demutualising was in the best interests of the company and its members.
During the Standard Life annual general meeting last Tuesday policyholders expressed anger and lack of confidence in the directors with 89,091 members (43%) voting against approving their proposed remuneration package.
With the value of the company falling from around £15bn in 2000 to £4bn this year, members at the meeting said the directors should give up their bonuses. Policyholders have seen their savings payouts fall by 40% over the past three years.
The backlash could also have been born of disapproval over proposals to demutualise. Speaking at the meeting, chief executive Sandy Crombie, who took home more than £1m in pay last year, said the board believes demutualising would be in the best interests of the company and its members.
He told the meeting: “Demutualising will maximise the value of the company, reduce risk, crystalise value for participating members and allow access to further sources of external capital.”
The proposal for demutualisation will be put to policyholders at the company's AGM in 2006.
But Kevin Morgan, managing director of EZI UK, says the vote against directors' remunerations could mean that members will be more inclined to vote for demutualisation. He says: “If members are not happy and have no confidence in the board, it could indicate they will be more inclined to vote in favour of demutualisation when they will be rewarded with more money.”