PAUL ROGERSON and DAMIEN HENDERSON
Standard Life's top three executives received more than £5m in pay last year, amid a cost-cutting programme that has seen the company axe thousands of jobs and slash staff pensions.
The payments are made up of salaries, benefits and hefty bonuses for the trio, revealed in Standard Life's first annual report as a quoted company. It comes less than a month after the insurer announced a further 1000 job losses to add to the 4500 posts axed since management signalled its intention to demutualise Standard Life in 2004.
Standard Life wants to cut UK costs by £100m a year by 2009 and Scotland is expected to be hit particularly hard. Some 7500 of the company's 10,500-strong workforce is based in Edinburgh.
Sandy Crombie, the Standard Life chief executive who floated the former mutual on the stockmarket last July, received over £2.2m, a rise of £871,000 on 2005.
Keith Skeoch, chief executive of Standard Life Investments, received just under £2m, including £1.5m in bonuses. This month the company's board approved another bonus for Mr Skeoch of nearly £800,000 on top of his annual pay. Meanwhile, Trevor Matthews, the Australian UK retail chief viewed as Mr Crombie's heir-apparent, got £1.3m in 2006.
Unions and politicians called the payments "obscene" and another example of a "fat cat" bonus culture that was widening social inequality, pushing up house prices and damaging the fight to control UK inflation.
Willie Gibson, regional officer at Amicus, the trade union that represents workers in the financial sector, said the payments were "absolutely scandalous".
"It is another reprehensible action from the senior people at Standard Life," he said.
"In December, they announced the closure of their final salary pension scheme. In March, they announced record profits - 55% up on the previous year - and declared to the stock exchange they would make even more profits by shedding a further 1000 jobs.
"The treatment of their staff is in sharp contrast to what they have just awarded themselves. It really is disgusting."
Stephen Boyd, assistant secretary at the STUC, said the payments were outrageous and warned they would fuel UK inflation, putting pressure on British manufacturing jobs. "They need to start thinking about the impact the top ranks of the financial services are having," Mr Boyd said.
"Monetary policy is about fighting inflation, which is being fuelled by these sorts of bonuses. These rises are also feeding into Britain's growing inequality gap.
"We have very much recognised the Chancellor's success in attaining record employment levels. What we are not managing to do is stop growing inequality."
John Wilson, director of the Scottish Low Pay Unit, also condemned the bonuses, which he said would create a large gap between society's richest and poorest members.
John McFall, the West Dunbartonshire MP who chairs the parliamentary finance committee, said: "Standard Life policyholders have felt the pain but not the gain, which seems to have been concentrated at the top of the company."
However, Standard Life insisted yesterday its top three chief executives had been rewarded for the company's "exceptional performance".
Gerry Grimstone, group chairman-designate, said: "The Standard Life turnaround continued apace in 2006 with improved profits, improved sales and £3.4bn delivered to former members at the point of flotation.
"I believe this was an exceptional performance and it is vital to our continued success that the awards to our executive team reflect this. As always, our philosophy is to reward good performance and not pay out for bad."
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