Building society boss paid £1.1million for ONE DAY of work

Rewards: Skipton’s Stuart Haire was just one of the bosses to pick up a big payout

When Stuart Haire joined Skipton, one of the country’s biggest building societies, on New Year’s Eve last year, he said he was ‘hugely excited and humbled’ to become its chief executive.

What he or the building society, owned by its customers, did NOT reveal is that for his one day of work in 2022 – Saturday, December 31 – he received remuneration of £1,151,000. The equivalent of £143,875 an hour, assuming he worked an eight- hour day. An almighty financial jackpot, whichever way you spin the wheel.

Haire’s rewards are the most outlandish to be revealed by an exclusive survey of building society chief executive pay conducted last week by The Mail on Sunday. We examined the latest report and accounts of all 43 societies which between them manage assets in excess of £500 billion and look after the savings of more than 22 million customers.

The key data is provided in the table below. The year ends range from the end of January 2022 (Scottish) through to the end of December 2022.

Although many of these longstanding institutions do a great job supporting local communities and paying savings rates superior to those offered by high street banks, executive excess is rife within their boardrooms. According to our analysis:

• Twenty five of the 30 societies with year ends of December 2022 paid their bosses a bonus for their work during 2022;
• Bonuses ranged from a modest £7,157 collected by the boss of Penrith to the £408,000 paid to the head of Yorkshire who was chief executive for just over half the year;
• The total remuneration received by these 30 bosses ranged from the £1,151,000 received by Skipton’s Haire, down to £55,000 that the new boss of Bucks got for four months’ work. Remuneration comprises salary, bonuses and benefits such as pensions and cars. And in some cases, as with Skipton’s Haire, 2022 remuneration included compensation for losing bonuses from a former employer; 
• In only one case – the Principality – out of the 30 societies with December 31 year ends did a boss see their overall pay fall in 2022 (one other saw their remuneration fall in the year to April 2022); 
• Seven of the 30 bosses received double-digit increases in remuneration for their work in 2022; 
• During 2022, most building societies saw a boom in profits with a sharp increase in the net income (the net margin) they received from customers. This is the difference in the interest payments that building societies receive from mortgage borrowers and pay to savers. 

Although Stuart Haire was announced as the boss of the 150-year-old Skipton in late June last year, he did not join until the last day of 2022. The society’s 2022 accounts show that he received £1,151,000 – £3,000 of it being ‘salary’. 

The rest, as explained in footnotes, comprises compensation for rewards he forfeited as a result of leaving his previous employer HSBC. He joined HSBC in 2017, becoming head of wealth and personal banking in 2020. Of the £1,148,000 ‘compensation’ paid to Haire by Skipton, £345,000 represents the value of the 2022 ‘bonus opportunity’ he lost by quitting HSBC. The rest – £802,686 – represents the value of forfeited ‘HSBC deferred cash and share awards’.

Alan Debenham, founder of the Building Societies Members Association, says that while societies such as Skipton are keen to promote their mutual values – owned by members (customers), not shareholders – mutuality does not extend into the boardroom.

He says: ‘Too many societies such as Skipton justify eye-watering executive pay by pointing to the financial rewards bank executives receive. That’s not right. It’s time for a renaissance in the membership focus of building societies, with the rewards directed into the pockets of savers rather than executives.’

While Skipton – the country’s fourth largest behind Nationwide, Coventry and Yorkshire – says in its accounts that it paid savers a ‘fair’ rate of interest in 2022, the minimum it paid on a variable rate account (1.75 per cent) was only half that of bank base rate at the year end.

Indeed, the society saw net interest income soar from £296.7 million to £424.4 million, contributing to a jump in overall profits of 9.9 per cent to £298.8 million. 

On Friday, Skipton said while Haire’s rewards of £1,148,000 counted towards his 2022 remuneration, they represented ‘deferred payments that span beyond five years’.

It added: ‘Pay is set by a remuneration committee comprising independent non-executive directors and supported by external professional advisers.

‘The pay of all executive directors is benchmarked against the marketplace to ensure it is appropriate in comparison to our competitors, and sufficient to attract and retain people with the skill and capability needed to run the complex and diversified Skipton Group, which includes the UK’s largest estate agency.’

The Mail on Sunday asked Coventry, Yorkshire, Leeds and Newcastle to defend the remuneration paid to their respective bosses (£967,000, £965,000, £752,000 and £730,000).

Coventry said: ‘To be one of the UK’s best mortgage and savings providers, we need the best people to deliver the services, value and security that our members expect. And whether it’s a branch customer service assistant, an IT developer, or the chief executive, we benchmark our roles against similar organisations in order to attract and retain the talented people we need.

‘Under Steve Hughes’ leadership we’ve raised savings rates quickly and continued to offer higher rates than the market average – paying £230 million in additional interest to members as a result.’

Yorkshire said the remuneration paid to Alasdair Lenman was aligned with the society’s goal of enduring business success. It said its savings rates last year beat the market average consistently – by 0.56 per cent.

Newcastle boss Andrew Haigh received an inflation-busting increase in 2022 of nearly 24 per cent. The society said the increase was part explained by an independent review of executive rewards, ‘helping to bring them closer in line with peers in the sector and the wider marketplace’.

Leeds said bonuses for staff, including directors, were ‘linked to successfully achieving corporate and personal objectives’. It also pointed out at last year’s annual general meeting, more than 92 per cent of voting members gave the thumbs-up to the directors’ remuneration.

Members have the right to vote on 2022 executive remuneration at AGMs, many held this month. Votes can be made online or in person. Nationwide’s 2023 accounts will be published next month. All eyes will be on the remuneration of new boss Debbie Crosbie.

This post first appeared on Dailymail.co.uk