Virgin Money executives could face a significant investor backlash following criticism from an influential adviser regarding CEO David Duffy's £2.6 million package, which Pensions and Investment Research Consultants (Pirc) deemed "not appropriate" compared to the bank's average employee earnings.
Pirc, advising shareholders including UK local authority pension funds, expressed concerns about the lack of board-level accountability for sustainability issues at the sixth largest UK lender. They are urging investors to vote against two resolutions at Virgin Money's upcoming AGM on March 1st, specifically the annual report and pay report. The pay report outlines the final payouts for executives based on their performance over the past financial year. Pirc cited worries over Duffy's package, which includes a £331,000 bonus, noting it is 37 times higher than the average Virgin Money worker's salary of £71,804 annually.
Highlighting the disproportionate CEO-to-employee pay ratio, Pirc stressed that it exceeds the recommended limit of 20:1, deeming it inappropriate. Median pay figures, indicating the midpoint of the salary range at the bank, reveal an even wider gap, with Duffy's total payout being 66 times that of the median employee's £40,254 earnings. A potential shareholder rebellion would mark a setback for the FTSE 250 bank, which previously garnered 98% approval for its pay policy last year.
Pirc's critique follows Virgin Money's revelation of a 42% decline in annual pre-tax profits in November, attributing it to a £309 million provision to guard against potential defaults.