Clydesdale hit by major investor pay revolt

David Duffy

The group recently revealed it swung to full-year losses of £164m after an extra £150m charge linked to the mis-selling of payment protection insurance.

The shareholder advisory group ISS had recommended voting against the pay terms put forward this week, which it said were not justified by the recent £1.7 billion acquisition of Virgin Money.

CYBG said 34.2 per cent of investor votes rejected its pay plans at its annual general meeting (AGM) in Melbourne, Australia.

A further 7.4 million shareholder votes were withheld.

The revolt comes after CYBG revealed plans to boost payouts and bonuses for chief executive David Duffy and chief financial officer Ian Smith.

Mr Duffy’s potential bonuses would rise to 118 per cent of his salary, while his long-term share payout would rise to 177 per cent – meaning his total maximum payout could jump from £1.8 million to a possible £4.2m if all targets are met.

Mr Smith could see his total pay package surge from £914,000 to £2.1m.

The AGM also saw 6 per cent of shareholders vote against re-electing Mr Duffy and Mr Smith.

While the company is listed in London, around half of its shareholders are in Australia and shareholder meetings alternate between the UK and Australia - a legacy of its previous ownership by National Australia Bank. 

CYBG said while the plans were approved, with 65.8 per cent of shareholders voting in favour, it “recognises the large number of votes opposing the resolution” and has pledged further talks with investors.

CYBG said: “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.”

Shareholder advisory group ISS said: “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.”