Standard Life Aberdeen plans £1.75bn return to shareholders through Phoenix deal as bosses defend year one perfomance

Stakeholders pointed to the company’s share price which has fallen since the £11 billion tie-up between pensions giant Standard Life and Aberdeen Asset Management last August.

Responding to criticism voiced by shareholders, Sir Gerry Grimstone, who became chairman of the enlarged group after holding that position at Standard Life, said the tie-up should be viewed as the important first step in a long term strategy to turn Standard Life from a capital heavy and old fashioned insurance company into a capital light growth business.

He said: “More than 99 per cent of the shareholders voted for the merger and I’m very confident that over time the strengths of the merger will come through, the advantages of this being a global company will come through.”

The chairman was backed-up by joint chief executives Keith Skeoch and Martin Gilbert.

Mr Skeoch, who used to run Standard Life, said: “I do believe that there’s an awful lot of disruption and dislocation in the world and that what we are doing is creating something very special and unique that will be able to take advantage of the way in which the world is changing.”

And Mr Gilbert, former head of Aberdeen Asset, said: “I think we’re all disappointed in the share price, clearly we’d like it to be higher but in the long term I think our strategy is absolutely correct.”

The AGM saw the company’s directors’ remuneration policy win the support of 97.9 per cent of votes cast, however, one shareholder questioned if it was “worth having a second CEO” considering they are likely to earn more than £4m a year.

The firm’s proposed new remuneration policy allows both Skeoch and Gilbert to earn up to £4.3m a year, according to the company’s annual report.

The meeting in London also saw Standard Life Aberdeen reveal that it expects to return £1.75bn capital to shareholders after the sale of its UK and European insurance business to Phoenix completes.

Standard Life announced in February it was selling its insurance arm to Phoenix in a £3bn deal.

Ahead of yesterday’s AGM the investment firm said it proposes to return £1bn to shareholders through a “B share scheme” and the remaining £750m will be returned through a share buyback programme.

The return of capital is expected to take place on 25 June.

The company says the rest of the proceeds will be used to pay down its £1.9bn debt as well as going towards other investment and corporate activity.

Sir Gerry Grimstone said: “We are continuing to focus on harnessing the breadth and depth in our investment capabilities to deliver cost effective solutions to meet the needs of our clients and customers across multiple channels and geographies.”

He says: “The cash generated from the sale will enable us to continue to invest in the development of our business and also to return surplus capital to shareholders.”