Glass Lewis Hits Back at StanChart CEO Winters in Pension Tussle

(Bloomberg) -- The shareholder adviser that urged Standard Chartered Plc’s investors to vote down a pension package for top executives stood by its criticism after the bank’s boss called its campaign “immature.”

The emerging market-focused lender’s pension proposal was “relatively opaque,” said Martin Mortell, director of research for the U.K. and Europe at Glass, Lewis & Co., a proxy adviser that researches corporate governance and advises institutional investors how to vote at companies’ annual meetings.

“Regulators and investors alike have deemed pension inequality to be a key front in the effort to restore public confidence in U.K. Plc,” Mortell said. “It was only natural that executive pension contributions at Standard Chartered be subjected to such intense scrutiny.”

Bill Winters, the London-based bank’s chief executive officer, told the Financial Times earlier that “picking on individual pension arrangements” and “suggesting that there is some big issue there is immature and unhelpful.” A sizeable number of investors revolted at the lender’s annual shareholder meeting in May, with the bank’s remuneration policy rebuffed by 36% of the votes cast.

Corporate Code

British firms are under pressure to level the playing field on pensions, with the U.K. Corporate Governance Code recommending that awards for top employees stay close to those for rank-and-file staff.

Previously, StanChart’s CEO and other senior executives received an annual pension contribution equal to 40% of their base salary. This year, StanChart changed that award to 20% of “total salary,” which didn’t reduce the contribution; total salary includes both base salary and the fixed pay allowance -- which is equivalent to 100% of base salary.

That formula put Winters’ pension cash allowance this year at 474,000 pounds ($588,000), up from 460,000 pounds a year earlier, according to the bank’s annual reports. Winters, 57, has been CEO since 2015.

By contrast, HSBC Holdings Plc, StanChart’s rival in much of Asia, cut pension contributions to executives including CEO John Flint so they roughly matched the proportions available to ordinary members of staff. Flint’s pension cash allowance was cut from 30% of base salary to 10%, reducing his award from 372,000 pounds to 124,000 pounds.

A spokeswoman for Standard Chartered declined to comment.

©2019 Bloomberg L.P.

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