Schroders, the City investment group that has led calls for pay restraint in recent days, is proceeding with a new plan to pay its chief executive up to £9 million a year, according to today’s Times.
It also has emerged that he received a £2.55 million share award from the company just 3 weeks before calling on listed British companies to consider reducing executive pay and bonuses.
The Investment Association (Chairman, Peter Harrison) wrote to FTSE 350 company chairmen last week suggesting they consider cutting executive rewards if the company was cancelling dividends or reducing the pay of its workforce. Schroders also wrote to FTSE 350 companies, plainly stating that it expected executive pay cuts in some cases. “Where companies seek additional capital we would expect their boards to suspend dividends and to reconsider management’s remuneration,” it said.
While Schroders has not raised new capital and has held its dividend unchanged, its decision to lift Mr Harrison’s potential pay has come as a surprise, particularly because of the substantial losses its clients will have suffered.
Luke Hildyard, chief executive of the High Pay Centre, said: “There’s an air of hypocrisy about encouraging other companies to show restraint on top pay while continuing to enjoy multimillion-pound pay awards yourself.
“When hospital workers, cleaners, carers, supermarket staff, refuse collectors and delivery drivers are keeping the country going for very little pay, public patience for overpaid chief executives will — rightly — be limited.”
Schroders is proposing the new pay plan for Mr Harrison, who was paid £6.48 million in 2019, at its annual meeting on April 30.
Sir Damon Buffini, who chairs the Schroders board pay committee, said in the annual report: “Peter achieved a great deal during 2019.” That included winning a record amount of net new business for the firm of £43 billion.
On March 11, Schroders awarded Mr Harrison around 95,996 Schroders shares at “nil cost”, which today are worth £2.55 million.
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