Some members will have seen the recent press coverage on pension allowances for chief executives.
This campaign started when we wrote to the Investment Association criticising the pension allowance for Mr. Antonio Horta-Osorio, Group Chief Executive of Lloyds Banking Group. The Investment Association, which is the trade body that represents UK investment managers who collectively manage over £7.7 trillion on behalf of clients in the UK and around the world, issued a set of Remuneration Principles saying that executive pension allowances should be aligned with the majority of the workforce.
In our letters we highlighted (https://files.tbuonline.co.uk/letters/letter-cummings-22-3-19.pdf, https://files.tbuonline.co.uk/letters/letter_cummings_15-3-19.pdf, https://files.tbuonline.co.uk/letters/letter_cummings_13-3-19.pdf) the fact that Mr. Horta-Osorio was still entitled to a final salary pension despite the fact that he’d removed it for everyone else in Lloyds in 2014. Many TSB members will remember that. Within 24 hours of our letters being covered by the newspapers, Mr. Horta-Osorio was forced into reducing his final salary pension perk. But that only made things worse because we’d also highlighted the fact that his pension allowance was only being reduced from 46% to 33% of base pay, when Lloyds staff only get employer contributions of between 10-13% like their ex TSB colleagues. Lloyds is coming under mounting pressure to reduce his pension allowance and there is every chance it will be voted down at the Annual General Meeting in May.
In her previous job, Ms.Crosbie, the incoming Chief Executive of TSB, got a pension allowance of 22%, which was worth £100,000. Mr. Pester got a pension allowance of 17.5%. We would expect Ms Crosbie’s pension allowance to be aligned to everyone else’s in TSB – between 10% – 13%. Anything more than that would be completely unacceptable given the fact that staff have had their TSB Award taken away this year and have been offered the worst pay settlement in the finance sector. Incidentally, the Chief Executive Officer of Sabadell, Mr. Jaime Guardiola Romojaro, gets a pension allowance of 761,761 euro (£654,075) or 56% of his base pay. If Sabadell was a UK listed company, that would be the biggest pension allowance of any FTSE 100 boss.
The pension arrangements for all chief executives are under the spotlight and TSB should come clean by publishing the allowance for Debbie Crosbie. TSB will have to publish the information eventually, so it should do so now to show that Ms.Crosbie is not breaching the Investment Association Remuneration Principles.