Equitable defends duo's bonuses

EQUITABLE Life was plunged into further controversy today as it revealed that the chairman and chief executive of the troubled insurer have reaped bonuses totalling £472,500 for the past year. Chairman Vanni Treves received a £225,000 bonus in addition to his base salary of £60,000 while chief executive Charles Thomson was paid a £247,500 bonus on top of his base salary of £275,000.

The pay deal was approved at a board meeting last week and represents 90% of the maximum incentive payments available to both men. The society defended the awards, saying they reflected their substantial achievements over the past 12 months. Equitable also revealed its non-executive directors were paid a £15,000 bonus each in addition to their base salaries of £10,000.

Sir Philip Otton, chairman of Equitable's remuneration committee, said the payments had been made following advice from executive pay consultants, who told the society the awards were 'in line with the industry norm'.

He added: 'The 90% bonus is for the enormous time Treves has devoted to Equitable. It has been an exceptional contribution in remarkably difficult circumstances. They (the payments) are appropriate, fair, justly deserved and certainly not over-generous. They are not overpaid.'

News of the awards emerged as the directors of the ailing mutual came under fresh attack from policyholders attending today's annual meeting, forcing Equitable's executives to insist repeatedly that the society was solvent and had not been guilty of cover-ups and financial manipulation.

Equitable was forced to close to new business in late 2000 and slash bonus payments to policyholders after it revealed it could no longer afford to honour guarantees due to falling stock markets and annuity rates.

Today's policyholder attacks prompted an angry response from Treves, who said he was 'sick and tired' of claims that the Equitable board was keeping information from members. Financial director Charles Bellringer also returned the fire, blaming the media and financial advisers for fuelling concerns that Equitable was insolvent.

However, Equitable Members' Action Group chairman Paul Braithwaite claimed the society had deliberately withheld publication of its latest financial returns until after the deadline for members' postal votes on resolutions to remove key board members, including Treves, had expired.