Further bank execs to take pension cuts

The chief executives of Barclays and Santander are expected have their pension allowances cut to meet Investment Association guidelines, following a similar move by Lloyds Bank earlier this week (27 November).

First reported by the Financial Times, Barclays chief executive, Jes Staley, is set to receive £396,000 as a cash lump sum in place of his pension this year, equivalent to 34 per cent of salary.

However, from 2020 Staley will take a cut of of more than £200,000, bringing his lump sum pension payment down to around 17 per cent of his £1.18m salary.

Furthermore, Barclays has is reportedly considering increasing their employee pension contributions up from 10 per cent to 12.5 per cent.

According to the Telegraph, Santander chief executive, Nathan Bostock's, pension is also under review to meet the new guidelines.

He currently receives around 35 per cent of his £1.7m salary, around £580,000, compared to the maximum of 12.5 per cent offered to other Santander workers.

HSBC and the Royal Bank of Scotland have also agreed to review their executive pensions.

Lloyds Banking Group chief executive, Antonio Horta-Ososrio, will take a pension allowance cut from 33 per cent to 15 per cent of base salary for 2020.

MPs had previously criticised banks' executive pensions and summoned Horta-Ososrio to discuss the bank's approach to its pension policy.

Earlier this week, LCP partner, Phil Cuddeford, said: “Around 30 FTSE 100 companies have already announced changes to their contribution rates for executive directors - mostly to reduce rates for future appointments – in order to fall into line with guidance issued by the IA for 2020.

“According to the guidance, companies will now have to focus on their current executive directors, without providing any compensation for the resulting reduction.

“Additionally, remuneration committees are expected to set out a credible action plan to reduce pension contributions for current executive directors by the end of 2022 to the level applying to the majority of the workforce.

“Companies will also need to disclose the pension contribution level provided to the majority of the workforce and how this has been derived.”

    Share Story:

Recent Stories

De-risking options for pension schemes
In this latest Pensions Age podcast, Linklaters' Sarah Parkin talks to Laura Blows about the wide range of choice available to pensions schemes for the partial, or full, removal of their risks

Risk transfer opportunities
Laura Blows speaks to Lisa Purdy, Head of Fiduciary Distribution at Legal & General Investment Management and Gavin Smith, Pricing and Execution Director - UK PRT at Legal & General, about the impact of the recent market volatility on the bulk annuity and risk transfer market and the potential opportunities for the future

Bulk annuities during coronavirus
Laura Blows speaks to Just business development manager Prash Mehta about the impact of coronavirus on transactions

Investing in infrastructure
Laura Blows speaks to James Dawes about how, and why, pension funds should be looking at infrastructure as an investment opportunity