Business

Clydesdale Bank investors rebel over directors' pay

People walk past a branch of Clydesdale Bank in Edinburgh Image copyright Getty Images

More than a third of shareholders in the company that owns Clydesdale and Yorkshire banks have voted against the pay of its top executives.

CYBG, which has taken over Virgin Money, said it "recognises the large numbers of votes opposing the resolution" on pay.

It said it would hold more discussions with shareholders to understand their views on pay.

Under CYBG's pay plans, chief executive David Duffy's bonus may increase.

Chief financial officer Ian Smith also stands to be paid more as a result of changes to the pay scheme being made following the takeover of Virgin Money.

At its annual meeting held in Australia, some 34% of investors voted against the pay plan.

While the company is listed in London, some 50% of its shareholders are in Australia, which is a legacy of its previous ownership by National Australia Bank. Shareholder meetings alternate between the UK and Australia.

The shareholder advisory group ISS had recommended voting against the pay terms, which it said was not justified by the Virgin Money deal.

"Although it is recognised that the acquisition of Virgin Money has significantly increased the size and operational scope of the company, the acquisition and the other market-related factors cited by the chair of the remuneration committee do not seem sufficient to justify such a substantial increase to variable remuneration," ISS said.

The bonus plans - which are calculated as multiples of salary - could boost Mr Duffy's potential pay to £4.2m from £1.8m, according to media reports.

Mr Duffy's salary is £1m and his total pay last year was £1.8m when bonuses are included.

CYBG said: "In addition to the extensive consultation of shareholders undertaken prior to the publication of the directors' remuneration report, the company will further engage with shareholders on the implementation of its remuneration policy over the coming months to ensure shareholder views are fully understood and considered."

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