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Big bonuses for Standard Life bosses despite losses

Standard Life is paying directors big bonuses and pensions despite

stockmarket losses and pulling out the stops to clear regulatory

solvency hurdles.

The mutual is awarding performance-related bonuses to directors.

Chief executive Iain Lumsden was paid £743,000 last year. This

includes salary of £467,000, £16,000 benefits including

car, £136,000 performance-related bonus and £124,000 as the

cashable part of a long-term incentive. He has accrued a further

£402,000 longterm incentive and an upgraded pension entitlement

of £301,000 a year.

Deputy chief executive Sandy Crombie was paid a total of

£586,000, including a performance-related bonus of £122,000.

Standard had to call on future profits of £1.5bn for the first

time and ignore its debt liability of £1bn to avoid breaching

solvency requirements. It has announced a free-asset ratio of 13.8

per cent.

Figures produced by analyst Ned Cazalet show that on the same

calculations that pro- duced last year&#39s declared 5 per cent

free-asset ratio, Standard would now have a free-asset ratio of -0.4

per cent.

Standard refuses to acknowledge the figures but does not dispute

them. It says remuneration is reviewed independently. Its annual

report shows the total investment loss on long-term business was over

£6bn. The with-profits fund is down by £4bn.

Standard Life actuarial director Bob King says: “These figures are

soon going to be irrelevant when the FSA changes to a less artificial

reporting regime.”

Cazalet says: “Monkeying about with the figures this way is no way

for a major company to behave. You cannot just pluck a figure and

multiply it by your granny&#39s age.”

BestInvest director John Turton says: “It is concerning that Standard

seems to be very exposed and if the market falls it could make

matters worse. The timing of the bonuses is terrible and will only

increase antagonism.”


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