The board of St James’s Place has axed the £456,700 annual bonus that had been due to its former boss for last year after he presided over a tumultuous final few months in charge of Britain’s biggest wealth manager.
Andrew Croft, 59, had earned a payout worth 81 per cent of his £563,862 base salary but the board’s remuneration committee used its discretion to deprive him of the bonus, disclosures in the FTSE 100 company’s annual report show.
The committee made the decision after “taking account of the significant overarching responsibility for company performance that goes with the chief executive officer role”. The development comes after St James’s Place endured what analysts at Bank of America have called its annus horribilis in 2023.
Shares in the £168 billion wealth manager tumbled by about 38 per cent last year after it was twice forced to overhaul the lucrative fees it charges its clients, in July and October, after pressure from the Financial Conduct Authority, the City regulator. This overhaul, which will cut the future profitability of the group, marred Croft’s final year in charge of the Cirencester-based business, which he had run since 2018 and joined in 1993.
His legacy as chief executive was further tarnished in February when Mark FitzPatrick, who succeeded Croft in December, revealed that St James’s Place had set aside £426 million to cover the cost of refunding clients who had not received the service for which they had paid from the business in previous years. This pushed the wealth manager to an annual post-tax loss for 2023 and prompted it to cut its dividend, which stunned investors, who sent St James’s Place shares down by 19 per cent on the day.
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In another blow to Croft’s pay for last year, share awards he was granted in 2021 that were worth up to about £450,000 but subject to three-year performance targets failed to pay out after St James’s Place missed the criteria underpinning the incentive scheme. This, as well as the axed bonus, pushed Croft’s remuneration package, including pension and other benefits, down to £695,545 for the 11 months to the end of November, when he stood down, compared with the £3.1 million he earned for 2022.
Paul Manduca, the chairman, and Craig Gentle, the finance chief, who both also oversaw the tumult of last year, remain in post. The pair now face scrutiny, according to one City fund manager who holds a stake in the wealth manager. “There are questions that need to be answered, for sure,” the shareholder said.
Gentle has already had his pay cut. Like Croft, he had been in line for an annual bonus worth 81 per cent of his salary, based on the performance of the business, but the board used its discretion to reduce it to 39 per cent, resulting in a £173,632 payout, the annual report shows. Share awards granted to him in 2021 similarly did not pay out.
Share awards granted to Gentle this year have also been cut by the board to 215 per cent of his salary from 250 per cent because of “the significant fall in the share price since the last round of grants”, according to the annual report.
A spokesman for the wealth manager did not comment on the pay decisions.
