Virgin Money investors protest against pay plans after boss lands 89% hike
Virgin Money has seen nearly a fifth of shareholders fail to back its pay plans for top bosses after it handed chief executive David Duffy an 89% pay rise last year despite widening losses.
The high street lender – formerly known as CYBG – saw 183.1 million, or 18%, of shareholder votes either made against its pay report or withheld at the annual general meeting.
While withheld votes do not count, it still saw more than 17% of votes cast against the remuneration report, with 83% in favour.
The overall remuneration policy was backed by 99.5% of investors.
It comes after Virgin Money’s 2019 annual report revealed Mr Duffy’s salary and bonus package soared to £3.4 million last year, up from £1.8 million in 2018.
This came despite the Clydesdale and Yorkshire Bank owner – which rebranded following the £1.7 billion takeover of Virgin Money last year – posting pre-tax losses of £232 million for 2018 from £164 million the previous year.
And Mr Duffy could also land a potential £5.1 million in pay and bonuses if all targets are met in 2020 – on a par with the likes of Alison Rose, chief executive at Big Five lending giant Royal Bank of Scotland.
The pay move has raised eyebrows, given that a third of shareholders opposed the group’s remuneration report last year, prompting the firm to consult with shareholders.
But Virgin Money said it would not be formally consulting with shareholders on pay plans this year as more than 80% of investors approved the 2019 remuneration report.
A spokesman for Virgin Money insisted the group was “pleased” with the outcome of the AGM votes.
He added: “We will continue to engage regularly with our major holders, as part of our normal interactions, to discuss all relevant aspects of the bank, its operations and policies.
“Virgin Money has strong relationships with its shareholders and we expect this to continue.”
The AGM vote comes after figures on Tuesday also revealed ongoing pressure on Virgin Money’s mortgage lending, with a 0.8% drop to £59.6 billion in its first quarter as it held off from slashing rates to attract borrowers.
It saw a better performance in its savings arm, with customer deposits up 1.6% to £64.8 billion over the three months to December 31, while business lending rose 2.5% to £8.1 billion.