Standard Life Aberdeen chief Keith Skeoch announces plan to step down

Bird will join the board this week and take over the CEO role after a handover period, after which Skeoch will leave, having served 15 years as a board director at SLA and Standard Life.

He will join on a salary of £875,000 plus a bonus of up to 250% of that and a long term incentive scheme potental award of 350% of salary for 2020 to 2022.

Skeoch and Gilbert's merger has proved deeply divisive in the City as it was often seen as having failed to deliver the value for shareholders that had been hoped for. However, the pair came together at a time of extreme stress for the industry, when low interest rates and correspondingly high asset prices were making tracker funds successful and far cheaper than stock-picking funds like SLA's.

Brokers at Berenberg said in a note to clients that the move meant "senior positions will mean the senior positions are filled by people not associated with the unpopular merger... so could make it easier for the company to pursue big M&A deals again.

Skeoch was widely seen as the straight man to Gilbert's more avuncular showman attitude. He assumed the role of running the day to day operations while Gilbert's strength was in winning new clients and keeping them happy and, often, entertained.

SLA said today that the sale of its life assurance business to Phoenix earlier this year, overseen by Skeoch, had paved the way for a "next phase of evolution" for the group based on an integrated asset management business with scale, plus opportunities to grow in wealth management.

Bird served as CEO of consumer banking at Citi from 2015 to last year, prior to that being chief executive of the megabank's Asia Pacific operations. He was at Citi for 21 years, also serving in that time in postings in Latin America. He started his career as an apprentice engineer at British Steel in 1983.

When he left, Citi CEO Mike Corbat said it was to pursue an "outside opportunity" but his consumer division at the bank had been seen by some critics of the bank as something of a weak link. The Financial Times pointed out at the time that he had hit fewer of his performance targets than his peers. He was replaced by Jane Fraser, who was also tipped as a future successor to Corbat.

Skeoch told the Evening Standard that, including his time running Standard Life Investments, he had been chief executive for 16 years. He said: “I will turn 64 in November and decided this was a good time to go.”

Predicting a major recession in the second half of the year, he said Covid had “slightly accelerated” his thinking as it would hasten the need for a three- year project of readying the business for a big push into retail as people saved more and spent less.

“I feel sad but but you can not go on for ever and I’m really pleased about my successor,” he said.

Asked what had been the hardest element of the merger, which has been seen as an extremely bumpy process, he said: "It is always difficult getting the culture right. Bringing two cultures together always takes a bit longer than you thought, but we have got there."

He added: "In the last 18 months we have seen a [positive] turn in the investment performance, flows and culture. We always said it would take three years to do this and I think we have successfully laid down strong foundations for what I think will be a successful, sustainable business."

He will become chairman of Aberdeen Standard Investment Research Institute on a salary of £615,000 until his notice period expires. The role will see him returning to his original roots in economics and research.

Skeoch is bearish on the economy, saying stock markets were "very full" - economist speak for expensive. "I suspect the second half of the year they will go through a pretty volatily time. Looking forward, I think as activity slows because of a rise in unemployment, fiscal stimulus effects will fade and the impact of central banks' actions will fade too - although I have to say the central banks have done a phenomenal job."

"Having been in the business for 40 years, I would not be chasing the markets. Do I think we are heading for some major crash in financial markets? No."

He said the history of recessions showed those which included a financial crisis were the worst and longest, while pandemics tended to rebound quickly.

In such markets, he said, active fund managers such as SLA would thrive after a decade of being beaten by passive tracker funds. "It's times like these when you need stockpickers to choose the difference between easyJet and IAG [owner of British Airways] or HSBC and Barclays. The opportunities for returns are deep down in the stocks. We will get back to the days when 80% of the returns will be from stockpicking and 20% asset allocation."