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Bonus backlash! 10 firms rocked by shareholder rage

Standard Life’s announcement that it would reject Barclays’ remuneration package at the bank’s annual general meeting this week is only one of many examples of shareholder discomfort over executive pay. Click through to read the top ten times firms were rocked by shareholder rage.

Lloyds Banking Group

Lloyds experienced a knock-back from its shareholders in May 2010 when they lashed out over the bank's pay deals.

Around 14% of shareholder votes, excluding the government's holdings, voted against Lloyd's remuneration report.

Investors were angry at the bank's decision to award chief executive Eric Daniels a £2 million bonus for 2009 despite the bank suffering huge losses.

Although Daniels waived the bonus, there was still a lot of anger directed towards the bank's remuneration committee which made the decision to award the pay.

Lloyds Banking Group

Lloyds experienced a knock-back from its shareholders in May 2010 when they lashed out over the bank's pay deals.

Around 14% of shareholder votes, excluding the government's holdings, voted against Lloyd's remuneration report.

Investors were angry at the bank's decision to award chief executive Eric Daniels a £2 million bonus for 2009 despite the bank suffering huge losses.

Although Daniels waived the bonus, there was still a lot of anger directed towards the bank's remuneration committee which made the decision to award the pay.

Royal Bank of Scotland

The Royal Bank of Scotland (RBS) succumbed to shareholder pressure in 2010 when it pledged to amend its executive pay scheme.

According to the Telegraph, RBS chairman Sir Phillip Hampton, admitted the bank's share price target element of its pay scheme, which had planned to reward its chief executive Stephen Hester with millions of pounds, was set too low.

This followed successful lobbying by shareholders who even wrote to city minster Lord Myners, who recently quit as a director of the Co-op Group.

Hargreaves Lansdown

Bristol-based discount stockbroker Hargreaves Lansdown suffered a backlash in November 2011 when a quarter of its shareholders failed to back the directors pay packages.

The figures are even worse when you consider at the time 52% of the shares were owned by co-founders Peter Hargreaves and Stephen Lansdown.

Shareholder activist group Pirc had called for shareholders to reject the pay proposals ahead of the meeting, pointing to concerns 'surrounding the operation of long-term plans which have no performance conditions or maximum award limits.'

The company was already in investors’ bad books that week as it also revealed plans over imposing new monthly charge on a number of funds on its Vantage platform while continuing to take a rebate from fund managers in some cases.

Credit Suisse

Credit Suisse’s investors spoke loud and clear when almost a third voted against the bank’s pay plans in April 2012.

Around 31% of the 1,700 shareholders rejected the bank’s pay plan and called for a bigger slice of profits.

At the time Brady Dougan, chief executive of the bank, tried to allay the anger and said he knew pay was a ‘controversial’ topic.

‘I recognise that this can be a very controversial topic ... However, having the right policies and structures in place is particularly important for a global bank, which is dependent on experienced and highly qualified people.’

Citigroup

In April 2012 Citigroup's shareholders won a vote against boosting the bank’s chief executive pay to $15 million (£9.4 million) for the previous year.

55% of the investors voted against the plans to pay Vikram Pandit a £9.4 million pay package, despite Citigroup stating its remuneration plans help attract and retain top talent.

Shareholders were angry at the amount proposed when the bank’s shares fell 44% in the same year the pay was scheduled for.

However the bank has recently had a reversal of fortunes as last week investors approved executive pay for 2013, including new chief executive Michael Corbat’s $14.5 million remuneration (£8.6 million).

Aviva

Aviva’s shareholders got the edge when 54% voted against its proposed pay package at its annual general meeting on 3 May 2012.

Much of investor anger was focused on the £2.5 million ‘golden hello’ granted to former Standard Life UK boss Trevor Matthews. Matthews joined Aviva UK as chief executive in 2011 and was due to be paid £2 million in shares and £470,000 in cash.

Initially, Andrew Moss, chief executive of the Aviva Group, decided to not to accept the salary increase he was granted in 2012. However, a few days after the meeting Moss quit and walked away with a £1 million 'golden goodbye' plus a £209,000 pension pot.

Matthews since then left Aviva in February 2013.

Prudential

Prudential’s shareholders took note of Aviva’s revolt and staged their own weeks later in May 2012.

Pru had proposed to pay seven executive directors a total of £29.8 million including share-based awards under its long term incentive plan.

Less than two-thirds of investors voted in favour of the plans including Scottish Widows Investment Partnership.

Pru was rocked again by shareholder rejection over pay in May 2013 when one in ten investors opposed its director pay policy

The rejection followed Pru's announcement that its chief executive Tidjane Thiam was set to receive a £7.8 million pay package for 2012 despite being fined £30 million by the Financial Services Authority (FSA) in March after failing to notify the regulator of its intention to buy Asian insurer AIA

UBS

Swiss bank UBS really upset its shareholders in May 2012 when its pay awards for the previous year were rejected by 37% of its investors.

The votes, which were made despite the bank’s attempts to change the way it set its executive bonuses, led to UBS’s chairman, Kaspar Villiger, to admit they had faced ‘significant opposition’ in their plans.

At the same meeting UBS said it regretted not introducing a ratio-linking bonus to salaries.

The charge was led by groups including F&C and Hermes Equity Ownership Services, who believed the bank has not reflected the €2.25 billion loss it made in a rogue trading scandal in its pay settlement.

HSBC

Last year, HSBC suffered an embarrassment when 14% of its investors failed to back its directors pay packages.

Chief executive Stuart Gulliver was due to take £7.4 million in pay in bonuses in 2013, up £0.2 million in 2012.

His pay rise was proposed despite a string of scandals that led to the bank being fined £1.6 billion by US regulators for money laundering penalties.

Barclays

Although Barclays has a history of clashing with shareholders over executive pay, it was a surprise to many when Standard Life publicly announced it would vote against its 2013 pay proposals in the bank’s annual general meeting.

Standard Life Investments owns 256 million shares or a 1.5% stake in the bank and its governance and stewardship director Alison Kennedy, made it clear the company would not approve the bank’s pay plans on behalf of its clients.

Barclays faced shareholder scrutiny over its decision to increase bonus pool by 10% to £2.4 billion in 2013 despite the bank’s profits falling by 32% to £5.2 billion.

The bank also had to change former executive Bob Diamond’s bonus terms following shareholder anger at his £17 million package for 2011.

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