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Abrdn shareholders have been urged by influential adviser Glass Lewis to vote against the asset manager's pay report due to the “substantial” salary of the new CFO.
Glass Lewis noted that Jason Windsor's basic salary of £675,000 was 25 per cent more than his predecessor Stephanie Bruce received, and appears to be more than usual for such a position.
The consultant said that although Windsor's base salary was the same as he had earned in his previous job, he believed “new executives should be appointed at a lower base salary than their predecessors.”
The proxy company's analysis sets the stage for a potential backlash from investors at the FTSE 250 asset managers' annual meeting on April 24. It follows a difficult period for the fund group, with its share price falling sharply, knocking it out of the FTSE 100 index twice in recent years.
Chief Executive Stephen Baird is trying to revive the company's fortunes by cutting costs and cutting 500 jobs – equivalent to 10 per cent of its workforce – while launching new products to attract other revenue streams. The Aberdeen company and many of its peers have come under pressure as clients continue to withdraw money from funds managed by stock pickers in favor of cheaper index-tracking products.
Windsor joined the Aberdeen company in October after holding the same role at housebuilder Persimmon. He previously worked at insurance group Aviva for more than a decade.
The Aberdeen company said in its annual report that Windsor's pay is based on “an assessment of what it takes to attract the skills and experience required by the market.”
But Glass-Lewis said shareholders would have been given a “more comprehensive rationale” for his “significant” base salary and more detail on how his salary compared with his rivals. She added, “This appears to exceed CFO salaries at most peer companies in terms of the company's market value.”
Glass Lewis said it was “unable to recommend that shareholders support this proposal at this time.”
Recommended
Institutional Shareholder Services, another high-level shareholder advisor, recommends shareholders vote in favor of Abrdn's proposals at its meeting.
In response to Glass Lewis, Aberdeen said: “Jason brings significant experience as a CFO who has spent several years working in large public companies. His appointment followed a rigorous process, including a detailed compensation evaluation that was based on a range of factors. He has already proven to be an asset “Valuable to the board and management teams.”
Baird came into the spotlight earlier this year after telling staff that bonuses would only be paid to “colleague workers”, while his total pay rose to £2.1m last year, from £1.7m the previous year. Linking pay to performance was “an important part of our approach to compensation across the company,” Aberdeen said at the time.
However, a growing number of UK boards are increasing CEO pay to compete with their US peers in an attempt to retain and attract talented directors, which has been cited as a drag on UK capital markets.
