Mutual fat-cats attacked for £1m-plus pay

Campaigners are urging members of financial mutuals to challenge £1m-plus executive pay packages at the customer-owned businesses.

The chief executives of Royal London, the biggest mutual insurer, Liverpool Victoria, the biggest friendly society, and Co-operative Financial Services (CFS) each received pay of about £1.25m in 2010, according to annual reports. These rewards were up to 25 per cent higher than in 2009.

Mike Yardley of Royal London also pocketed £2m from a long-term incentive plan, while the £1.25m of pay received by Mike Rogers of Liverpool Victoria included a £650,000 bonus.

Alan Debenham, secretary of the Building Societies Members Association, describes such high rewards as “verging on the obscene”. He argues they are at odds with the “everyone is in it together” idea of mutuals – especially given the relatively low returns for savers currently.

Members are being urged to vote against the remuneration via voting forms that have been sent out in advance of annual meetings in May. Co-op members, however, do not have this power of veto over CFS, as there is no direct vote on executive pay because of the Co-op’s committee-based governance.

All three mutuals defend their executive pay, claiming 2010 was a “good year” with increased profits.

Among building societies, only executives of Nationwide – the UK’s biggest mutual – are paid more than £1m. The 2010 remuneration of Graham Beale, Nationwide’s chief executive, will be published in June with the society’s annual report.