Yorkshire Building Society has defended its remuneration package for new chief executive Susan Allen by saying a big one-off payment included in her £4.046 million package for 2023 was to cover “lost earnings” related to her move from Barclays and is “common practice” for executive pay in financial services.
Members of the mutual have been urged by some customers to vote against Allen’s package at the society’s AGM later this month.
One member wrote in a local newspaper: “How can this be right? I would urge members like myself to vote against the remuneration report and the remuneration policy.”
The Bradford mutual said in its annual report: “Susan Allen joined the Society as Chief Executive on 2 March 2023 and was awarded an annual base salary of £785,000.
“Replacement awards include £1,684,356 awarded to compensate for deferred awards forfeited on leaving her previous employer and an award of £832,000 to compensate for lost incentive opportunity in respect of the 2022 Performance Period.
“In line with remuneration regulatory expectations these replacement awards will vest in line with prior vesting schedule.
“The bonus awarded to Susan (£777,000) for the 2023 performance period under the Building Together and Leading for Value bonus schemes has been calculated based on her annual salary as at 31 December 2023.”
For 2023, Yorkshire Building Society said its balances increased by £5.1 billion to £47.1 billion in 2023 as profit before tax slipped 10% to £450.3 million.
Explaining Allen’s remuneration package, a spokesperson for Yorkshire Building Society said: “In setting executive pay, the Remuneration Committee looks at a number of factors including the Society’s position against the market, as it is important that we are able to attract and retain the right talent in a competitive marketplace.
“Our member approved Remuneration Policy is structured to support the delivery of our strategy, recognising the Society’s performance and the value delivered for our members and customers.
“This year’s figures include a one-off payment to cover lost earnings related to Susan’s move from Barclays – this is common practice for executive pay in financial services.
“The Society attracted a record number of new savings accounts in 2023, delivered growth in both savings and mortgage balances and continued to increase our customer satisfaction scores.
“We are particularly proud our savers benefitted from interest rates 41 per cent higher than the market average, equating to an additional £441.1m in interest paid – more than double the previous year.”