Pay vote shame for Standard Life

HUNDREDS of thousands of Standard Life policyholders are poised to deliver a devastating vote of no confidence in the board - thanks to voting rules brought in this year.

They are mobilising to shame directors over their pay and the questionable management that has led to a dramatic showdown with the Financial Services Authority and the sudden departure of chief executive Iain Lumsden last week.

In coming weeks, all 2.6 million Standard Life policyholders will be balloted on board remuneration, including the final payment of salary, bonuses and perks to Lumsden.

The voting packs will arrive at the same time as savers are told their policies have fallen in value by up to 20% because of the way the FSA is insisting on the mutual calculating investment returns.

Lumsden departed under a cloud last Tuesday. His pay for the last financial year, likely to be between £550,000 and £650,000, will almost certainly include an element of performance-related bonus - even though 2002 is widely seen as the worst period in Standard's 178-year history.

Lumsden's turbulent two years in charge saw his pension rise by about £100,000 a year. He will retire on £300,000 a year.

One of the leaders of the revolt is Tim Askew of the Investors' Association. He said: 'We will use every tool to urge policyholders to vote against executive pay as a way to punish the board.'

Meanwhile, new Standard Life chief executive Sandy Crombie, 54, faces a tough baptism when the Treasury Committee questions insurance bosses as part of its inquiry into the long-term savings industry. Crombie will join his opposite numbers from leading rivals on January 27.