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In turning to Mike Rees as its new deputy chief executive, Standard Chartered has chosen a man used to being in the line of fire – and one of its biggest earners.
The 57-year-old banker has taken home $52m in the past four years, making him one of the world’s top paid bankers at a time of fierce criticism of the level of pay in an industry many blame for the financial crisis.
His stratospheric compensation first hit the headlines in April 2012 after shareholder advisory group Pirc advised investors to vote against Standard Chartered’s remuneration report, saying the $13.8m pay award for Mr Rees was too high.
The package consisted of a cash-and-shares bonus of $10m, plus long-term performance awards of $2.2m and a $1.1m salary. Pirc told investors Mr Rees’s bonus represented almost nine times his annual salary.
But although Mr Rees was the highest earner at the bank, he was the only executive director who received less in 2011 than in 2010, when he was handed $14.1m, and less than 10 per cent of shareholders voted against the pay deal.
After graduating from Birmingham’s University of Aston in 1978, Mr Rees qualified as a chartered accountant with Whinney Murray. He held several roles in finance at JPMorgan before moving to StanChart as chief financial officer for global treasury.
He spent 10 years working in Singapore, where he was responsible for the bank’s South East Asia Treasury businesses, before returning to London to take up the position of group head of global markets in 2000.
Two years later, he was promoted to the new role of chief executive, wholesale banking, where he oversaw commercial banking and global markets products. He was appointed to the board of StanChart in 2009.
Seen internally as one of the big brains of StanChart, Mr Rees has a broad grasp of the macroeconomics of the emerging markets in which the bank operates, as well as an unusually detailed understanding of on-the-ground operations.
But his style – full of nervous energy and a bullishness that is reminiscent of the pre-crisis years – is seen by some investors as a cause for concern. StanChart’s shares tumbled 4 per cent on Thursday morning following the confirmation of his promotion.
In 2007 – at the peak of the debt boom – Mr Rees stressed the importance of avoiding unexpected problems if credit conditions were to tighten.
In an interview with the Financial Times, he said: “What would reflect badly on us would be if we went back to the bad old days and had banana skins. Most of them came out of the blue.”
That appeared to happen in 2012 when StanChart was fined $667m in settlements with US regulators over allegations that it breached US sanctions with Iran.
Additional reporting by Patrick Jenkins