Clydesdale Bank and Yorkshire Bank owner CYBG has seen an investor backlash over bonuses for top bosses after more than a third of shareholders voted against its executive pay plans.
The group – which recently snapped up Virgin Money for £1.7 billion – said 34.2% of investor votes were made against its pay plans at its annual general meeting (AGM) in Melbourne, Australia.
A further 7.4 million shareholder votes were withheld.
CYBG said while the plans were approved, with 65.8% of shareholders voting in favour, it “recognises the large number of votes opposing the resolution” and has pledged further talks with investors.
The investor rebellion comes after CYBG revealed plans to boost payouts and bonuses for chief executive David Duffy and chief financial officer Ian Smith.
The plans mean Mr Duffy’s potential bonuses would rise to 118% of his salary, while his long-term share payout would rise to 177% – meaning his total maximum payout could jump from £1.8 million to a possible £4.2 million if all targets are met.
Mr Smith could see his total pay package surge from £914,000 to £2.1 million.
On the shareholder vote, 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.
“These views will also inform the company’s remuneration policy which will be subject to shareholder approval at the company’s 2020 annual general meeting.”
Influential shareholder advisory group ISS had suggested investors should vote down the proposals ahead of the AGM, questioning the rationale of the pay plans so soon after the Virgin deal, adding CYBG’s shares have dropped sharply since the takeover was approved.
Shares in CYBG have tumbled 38% since October.
But CYBG is said to have defended the pay plans due to the Virgin deal having boosted the size and complexity of the group.
The AGM vote also saw 6% of investors vote against re-electing both Mr Duffy and Mr Smith.
CYBG recently revealed it swung to a full-year loss of £164 million after it was forced to take an extra £150 million charge linked to the mis-selling of payment protection insurance (PPI).
