JEFF PRESTRIDGE: Six-figure bonuses for bosses, at a time when Covid has hit savings customers, seems egregious and terribly unmutual
Yorkshire Building Society made all the right noises last week when it announced an additional £1million investment in the communities it serves.
The money, it says, will be used in various ways: to help improve financial education in the classroom, equip people with digital skills to give them a greater chance of securing employment in a post-lockdown UK, and support local charities. There will also be a six-figure investment in its home city of Bradford.
All rather commendable. ‘Now, more than ever, with the current economic uncertainty, it’s important that we improve the financial resilience in the UK,’ said Mike Regnier, chief executive.
Egregious: Last year, Yorkshire boss Mike Regnier and his two other executives scooped combined bonuses of £528,000
‘As a mutual, we’re owned by our members and not shareholders, meaning we can reinvest profits to deliver benefits to our communities, members and colleagues and really deliver on our social purpose,’ he added.
Fine words from an individual who presides over a successful business that has assets of £45billion, nearly three million customers and made healthy profits last year of £161million (a tad down on 2019).
Yet this £1million of extra community investment does need to be put into context.
Last year, Regnier and his two other executives scooped combined bonuses of £528,000, taking their aggregate remuneration to £2,208,000. The biggest bonus – £226,000 – went to Regnier, whose total remuneration came to £926,000.
Of course, Regnier and his fellow directors should be rewarded well for running the Yorkshire – and their total remuneration is admittedly down on 2019 (£2,319,000).
But six-figure bonuses, at a time when the pandemic has raged and many savings customers have experienced savage cuts to the income they receive on their deposits, seem both egregious and terribly unmutual. They also put into context the £1million of additional community investment the society is so keen to flag.
Yorkshire’s executives are not alone in receiving juicy bonuses. Over at Coventry, for example, chief executive Steve Hughes only joined the society shortly after the pandemic struck in March last year.
Yet somehow, he managed to earn himself a full year’s executive bonus of £140,000, an ‘annual success’ bonus of £23,000 plus £160,000 for the loss of pay resulting from resigning as the boss of rival society Principality to join Coventry.
With nearly £15,000 of relocation expenses thrown in for good measure, Hughes earned £702,000 for just over eight months’ work. More on a pro-rata basis that his predecessor Mark Parsons earned in 2019 (£861,000). Richard Fearon, chief executive of Leeds, also enjoyed a £190,000 bonus, taking his remuneration for 2020 to £684,000, 3.8 per cent up on the year before.
The only big building society that has been sensitive over executive pay is Skipton. Last year, boss David Cutter and his three boardroom executives, received no bonus payments ‘in light of the Covid-19 pandemic’. For Cutter, it meant a drop in remuneration from £845,000 to £646,000.
Yes, it’s pay that most of us can still only ever dream of, but the lack of a bonus should be welcomed by Skipton’s customers.