Standard Life Aberdeen has been hit by a huge investor revolt over the pay package offered to its new finance boss.
At its annual general meeting in Edinburgh yesterday, 42% of its shareholder base voted against its remuneration report.
The focal point was the package for incoming finance chief Stephanie Bruce, who joins the firm on 1 June from PwC to replace Bill Rattray, who is leaving the £550 billion fund giant after three decades.
Her appointment was backed unanimously by SLA investors, with only 1.3% voting against it.
Bruce's pay package comprises a £525,000 salary and a bonus of up to 350% of her basic wage. She will also receive £750,000 worth of shares, which will invest in three equal tranches over three years from June 2020.
The vote comes after governance body Glass Lewis in April had urged investors to vote against Bruce's package, expressing 'severe reservations' regarding the one-off share award.
'While we recognise Ms Bruce’s experience as a financial services practitioner, we remain concerned that her salary is set higher than that of her predecessor, particularly given Mr Rattray’s experience at the company,' Glass Lewis said.
It added: 'We would expect such an increase in pay to take the form of phased increases across the lifespan of Ms Bruce’s term, reflecting concomitant increases in experience and knowledge of the company.'
At yesterday's meeting, SLA chair Sir Douglas Flint said the firm handed Bruce the incentive as it was required to recruit 'the outstanding candidate' from beyond the asset management industry.
In a statement, SLA said it would 'engage' with shareholders following the vote and provide an update in accordance with the UK Corporate Governance Code.
'Stephanie Bruce is an outstanding addition to our executive team at Standard Life Aberdeen, as our shareholders have acknowledged in their overwhelming endorsement of her appointment as CFO,' the firm said.
'The reason we made this award, was to allow us to attract a talented senior executive from outside of the investment management industry who was previously remunerated on a comparatively consistent annual reward package, without the significant deferral arrangements we apply.'