Customers of Nationwide are being urged to vote against the fat-cat pay being enjoyed by the board’s ‘gang of four’ executives at next month’s annual general meeting.
The call to action has been made by the Building Societies Members Association, a longstanding organisation that passionately believes mutuals such as Nationwide should be run primarily for the benefit of those who own them – savers and borrowers – and not for the personal gain of top executives.
In an exclusive interview with The Mail on Sunday, the association’s chairman Alan Debenham says Nationwide should not be in business to make ‘millionaires’ of its executives.
Customers of Nationwide are being urged to vote against the fat-cat pay being enjoyed by the board’s ‘gang of four’ executives at next month’s annual general meeting
He urges customers to signal their disapproval by voting against the directors’ remuneration at the society’s annual general meeting in Swindon on July 19.
Debenham, a long-time Nationwide customer, believes that as the country’s largest building society with more than 15 million members, it should be a standard bearer for the industry on key issues – such as fairer directors’ pay and greater boardroom democracy with customers encouraged (not discouraged) to stand for election.
Such an idea of customer representation in the boardroom is similar to the flag waved by Prime Minister Theresa May in the run-up to the 2016 Election as part of a mission to ‘make Britain a country that works for everyone, not just the privileged few’.
In summary accounts sent to customers earlier this month ahead of the annual general meeting in nearly four weeks’ time, Nationwide revealed its directors’ remuneration for the financial year ending April this year.
Lucrative: Nationwide’s Joe Garner earns twice as much as his closest rival
The figures showed that between them the society’s four executives – all male – shared annual remuneration of nearly £6.6 million.
The highest paid was chief executive Joe Garner who took home £2,317,000, bringing the remuneration he has received since joining the society in April 2016 from BT offshoot Openreach to £5.7 million.
Garner is by far the highest paid building society chief executive – his closest rival is Skipton boss David Cutter who last year took home £1,012,000.
Of the remuneration received by Garner and fellow executives Tony Prestedge, Mark Rennison and Chris Rhodes, nearly 60 per cent was in the form of performance bonuses, benefits (car, healthcare and insurance) and cash in lieu of pension allowances.
Nationwide’s accounts also reveal that eight other executives – non-board members – received annual remuneration ranging from £556,000 to £869,000.
Debenham, an ex-teacher from Taunton in Somerset, is well known to Nationwide. In the late 1990s and early 2000s he stood on six occasions for election to the board as a non-executive director. Each time he was unsuccessful.
Unlike some customers who would rather Nationwide demutualise, handing them windfalls in the process, Debenham is an ardent believer in mutuality. He says most financial mutuals are more customer-centric than banks. But he believes Nationwide is setting the wrong example with its stance on executive pay.
Call to action: Campaigner Alan Debenham
He adds: ‘The society says it is on the side of customers but it is an argument that is hard to accept when savings rates are at rock bottom and seven-figure remuneration packages are the norm in the boardroom.’
Debenham, 77, who will be attending next month’s annual general meeting, says: ‘I will be urging it to justify why it is happy to make millionaires of its executives.’
Eight million members are eligible to vote ahead of the meeting. Debenham says they should ignore the ‘quick vote’ which simply hands over their vote to Nationwide chairman David Roberts. Instead, they should use the ‘standard vote’ which allows them to vote against the remuneration report.
On Friday, Nationwide said it was essential to have at the top of the organisation the ‘right people with the right skills and experience to run a safe and sustainable society’.
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