How can you defend the chief executive's £2.3 MILLION pay? Nationwide's fat cat showdown

Angey: Jeff Prestridge asks the Nationwide’s board to defend the chief executive’s remuneration at the society’s AGM in Manchester

Angey: Jeff Prestridge asks the Nationwide’s board to defend the chief executive’s remuneration at the society’s AGM in Manchester

Sometimes personal finance missions are easier said than accomplished. Even for a hard-nosed journalist who has been around the proverbial block a couple of times – and more. In his time, chased off properties, verbally abused at conferences, and occasionally threatened.

Last Thursday, I set myself a new mission: to attend the annual general meeting of the Nationwide Building Society and challenge its board on executive pay. In particular, the £2.372 million awarded to chief executive Joe Garner in the financial year to April this year – a 2.3 per cent increase on the previous year. A sum that included a £1 million bonus and £185,000 of benefits.

It is a package that – as I have reported in previous weeks – has annoyed many a Nationwide customer, especially as the society is cutting savings rates on many of its accounts from next month.

It has also angered me – I am one of its 15.9 million members and so eligible to attend the AGM and ask the assembled board (15-strong in Nationwide’s case, only four of whom are women) difficult questions. It also entitles me to vote on a number of AGM resolutions, including approving the directors’ remuneration report.

So a simple mission on paper – stand up in an auditorium of some 300 people, speak into a microphone, and ask the question I’d been memorising all morning: ‘Chairman, how can you and the board’s head of remuneration defend the chief executive’s remuneration of £2.372 million and the 2.3 per cent increase on last year when savings rates for customers are being cut?’

All this while battling to ignore the flock of butterflies in my tummy last experienced when asked to do the reading in senior school at the daily morning service (I froze as Jesus fed the 5,000).

Nationwide moves the location of its AGM every year – last year it was Swindon, its HQ, next year it will be Newport, South Wales

Nationwide moves the location of its AGM every year – last year it was Swindon, its HQ, next year it will be Newport, South Wales

First obstacle was one of logistics: actually getting to Manchester, the venue for the AGM, for a prompt eleven o’clock start. For the record, Nationwide commendably moves the location of its AGM every year – last year it was Swindon, its HQ, next year it will be Newport, South Wales. 

Fine if it moves near you – not if it is 200 miles (Manchester) or 123 miles (Newport) away. It required a 5.15am ‘Boris bike’ cycle ride from my home in London to Euston station (with rain falling half way through) followed by an expensive train journey, interrupted by inevitable points failure at Rugeley.

At one stage I thought this Staffordshire town was as far as I would be going but in the end, I got to Manchester in plenty of time. Other Nationwide customers had set off at four in the morning to attend – barmier than me. Once outside the Manchester Central Convention Complex – where incidentally they are building a monument to those who lost their lives in the city’s Peterloo Massacre of 1719 – I was then quite literally surrounded by Nationwide personnel as I attempted to speak to customers ahead of the AGM.

One, part of the society’s events team, spoke into a microphone, obviously tipping off senior management that a mischief-maker had arrived. For a moment, I thought: Prestridge Massacre, 2019, but an entente cordiale was eventually reached (they backed off, I stood my ground like some latter day John Wayne).

Pay row: Nationwide boss Joe Garner earns £2.3million

Pay row: Nationwide boss Joe Garner earns £2.3million

All the customers I spoke to were delightful and not all were there – like me – to harangue the board over executive pay. Far from it.

Sheila McGowan, a 73-year-old retired physics technician, from Liverpool, couldn’t stop waxing lyrical about the society as a result of the compassion it showed her in the early 2000s when her daughter was killed in a car accident and she had to sort out the outstanding mortgage. She was there because she likes to take an interest in the organisations that look after her money.

Steve Bullough, a 65-year-old retired personnel officer from Stockport, seemed more outraged by the £2 million a year that Gordon Taylor receives as (departing) chief executive of the Professional Footballers’ Association – an organisation located within a referee’s whistle of the conference centre. ‘It’s his pay you should be criticising,’ he said, albeit with a smile.

Others were more supportive. ‘I’m voting against the directors’ remuneration,’ said John Dawson, a regular attendee at Nationwide AGMs. ‘In fact, I’m voting against all the resolutions. It’s outrageous that savings rates are being cut while the society’s executives all enjoy seven-figure pay packages.’ The 65-year-old retired baker said as much from the floor a couple of hours later.

Roger Seymour, a 73-year-old retired IT consultant from Didsbury, came sporting a tee shirt describing in algebraic terms the Duckworth-Lewis-Stern method for deciding the target score of a team batting second in a cricket match interrupted by rain. ‘Far too high,’ was his response to my question on the level of Joe Garner’s pay although he said he would probably only be voting against the appointment of the society’s auditors (Roger has a thing about auditors).

Once the AGM kicked off, the nerves ratcheted up, not helped by long speeches from society chairman David Roberts (very competent) and Joe Garner (a tad nervous). The layout was also intimidating with the 15 directors lined up across the stage as if they were the Politburo of the Nationwide.

When it was time for questions, they came thick and fast from the audience. There was praise for the society’s stance on branches (it will not leave a community it is currently represented in), a thank you for the good customer service at the Frinton-on-Sea and Stockport branches and a few personal gripes from customers about how they had been unfairly treated by the society (over debts and scams) which the chairman said would be addressed. There was even a suggestion from the board that it was looking at opening pop-up branches in libraries and civic centres.

After what seemed an eternity – one hour and 22 minutes after the AGM’s start – I was chosen by the chairman to ask my question. I stood up and delivered – and surprisingly was given a round of applause as I sat down, shaking like an oak leaf in a Manchester gale. 

Chairman Roberts admitted that the sums involved in executive pay were ‘large’ and that directors’ remuneration was one of the most difficult issues that the board had to address – along with cutting savings rates.

But he said that if Nationwide was a stock market-listed company rather than owned by its members, the market rate for Joe Garner’s position would be £4 million plus. Lynne Peacock, chair of the remuneration committee, talked about the need not to ‘operate in a vacuum’ and the importance of getting the ‘right people in the right roles’.

She also said Mr Garner’s increase for the year of 2.373 per cent was less than the average 4 per cent received by employees. She failed to mention that 2.373 per cent of £2.317 million (Garner’s remuneration in 2018) is £55,0000 – more than the remuneration for the average employee in 2019 (£30,939).

Of course, I voted against Garner’s pay, but I was in a minority – primarily because most Nationwide customers gave their vote ahead of the AGM to Chairman Roberts to cast as he saw fit. So it was at best a Pyrrhic victory. But mission accomplished.   


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