So the decision of Peter Sands (whose resignation last week was met with a surge in the bank’s share price) to forgo a variable pay award for the year was necessary to avoid a mutinous denouement to his tenure.
But his insistence that the sum he was awarded was “irrelevant” as he had already given it up was illogical.
Investors have an obligation to question the logic driving any bonus for Sands and his executives. In StanChart’s case, the larger the payout, the more vocal the outrage would’ve been.
Too often, board remuneration committees – oblivious to public opinion – hide behind the metrics made by lavishly rewarded pay consultants.
This criticism does not only apply to Sands or Standard Chartered, but the belief that forgoing a bonus after such a lacklustre performance is “showing leadership” suggests that the inhabitants of City boardrooms need to consult a dictionary.
Yesterday’s results brought comfort to investors anxious that Bill Winters will unveil a large capital-raising soon after he arrives as the bank’s new boss.
Their relief may be premature; there is little evidence to suggest that Winters will be any more averse to a kitchen-sinking exercise than any other recently arrived company boss.
As for the waived bonuses, Standard Chartered’s remuneration report will be released next week. Regardless of Sands’ “leadership”, investors should scrutinise it as carefully as ever – and if they do not like what they see, they should say so. Stuart Gulliver’s track record since 2011 bears the fingerprints of a pragmatist. In the long run, I suspect HSBC’s shareholders will thank him for that.
CAMERON GATHERS BUSINESS CHIEFS
There was a distinctly end-of-term feeling about the final meeting of David Cameron’s Business Advisory Group before the General Election.
The gathering in Downing Street last Wednesday was upbeat, according to my mole: both the Prime Minister and George Osborne expressed confidence that the Conservatives will be rewarded at the ballot box for a demonstration of economic competence during the last five years.
Mark Carney, the Bank of England Governor, made a rare cameo appearance at the meeting, outlining the need for caution over events in Greece.
Attendees included Sir Roger Carr, chairman of BAE Systems; Baroness Harding, chief executive of TalkTalk; and Prudential’s Tidjane Thiam.
Google chairman Eric Schmidt, was there, although the planned so-called Google tax on tech companies was tactfully omitted from the discussion.
Once the Budget is out of the way, expect the traditional letter-writing campaign from Tory-supporting businesspeople to begin immediately.
JENKINS CLEARS A DIPLOMATIC HURDLE
Antony Jenkins was evasive when asked this week what he made of the Liberal Democrats’ proposal for a further £1bn tax raid on Britain’s biggest banks.
“That’s a matter for politicians,” he said, with the possible subtext that the Lib Dems are unlikely to be in a position of meaningful influence after the General Election anyway.
But perhaps the Barclays chief executive was simply being diplomatic.
Word reaches me that the bank has recruited Jamie Lundie as the new communications supremo for its personal and corporate banking operations.
If that name fails to ring a bell, it may be because he is more widely known as the partner of David Laws, briefly a Lib Dem minister in the early days of the coalition and himself a one-time Barclays employee.
Jenkins’ reluctance to offend his new recruit is admirable.