Martin Gilbert, chief executive of Aberdeen Asset Management, suffered a 22% cut in his remuneration in the investment house's last financial year but his resultant £2.4m package kept him among Scotland's top earners.
Martin Gilbert, chief executive of Aberdeen Asset Management, suffered a 22% cut in his remuneration in the investment house's last financial year but his resultant £2.4m package kept him among Scotland's top earners.
Aberdeen's latest annual report, published on its web-site, shows substantial pay cuts for all three of its executive directors during a year in which pre-tax profits rose by a marginal 0.9% to £95.1m and the company embarked on a major redundancy drive.
The investment house' revenues rose by 24% to £430m during the financial year to September 30 and Aberdeen's chairman, Charles Irby, noted in his statement on the accounts that operating costs increased by 32%.
Aberdeen has since July announced two significant cost-cutting programmes, involving a substantial number of redundancies, amid the turmoil in global financial markets.
In July, it announced its implementation of a programme to cut annual operating costs by £57m. It announced earlier this month that it was now implementing further annualised cost savings of about £20m.
Gilbert, who performed a remarkable feat in bringing Aberdeen back from the grim days of the split-capital investment trust crisis in the early part of this decade with shrewd and well-timed acquisitions, saw his bonus fall to £1.938m in the year to September 30 from £2.625m in the preceding 12 months.
This caused Gilbert's overall remuneration to drop to £2.409m from £3.096m in the prior financial year.
Gilbert's basic salary was unchanged at £400,000, and he received a £70,000 cash payment in lieu of employer contributions to Aberdeen's defined contribution pension scheme. This £70,000 payment was the same as that in the prior 12 months.
Aberdeen's remuneration committee is chaired by non-executive director and Conservative MP for Kensington and Chelsea Sir Malcolm Rifkind, who served as a Cabinet minister under both Margaret Thatcher and John Major.
Setting out the bonus criteria, Aberdeen's remuneration report states: "For 2008 the principal objectives selected by the committee for the executive directors focused on the integration of the businesses acquired during the year, management of costs and achievement of operating efficiencies and ensuring key client and staff retention."
It adds: "Martin Gilbert has been awarded a bonus of £1,937,500 for meeting his defined objectives for the year which included those detailed above. £412,500 of this award will be paid in cash and £1,525,000 will be used to acquire a number of the company's shares which will vest in equal tranches in December 2009, 2010 and 2011."
In addition to his £2.409m remuneration for the 12 months to September 30, 140,000 shares in Aberdeen vested with Gilbert during the year when the performance criteria associated with this initially conditional award under the company's long-term incentive plan were met. At last night's closing price of 104p, these shares would be worth £145,600.
Deputy chief executive Andrew Laing's remuneration dropped to £576,000 in the year to September 30 from £701,000 in the preceding 12 months.
Laing's bonus fell from £400,000 to £275,000.
On top of his remuneration, 110,000 Aberdeen shares vested with Laing under the LTIP.
Aberdeen finance director Bill Rattray saw his remuneration fall to £576,000 from £686,000. Like Laing, Rattray's bonus fell from £400,000 to £275,000.
Rattray also saw 110,000 Aberdeen shares vest under the LTIP.
In contrast to the executive directors' falling remuneration during the 12 months to September 30, Irby received a rise in his emoluments to £146,000 from £132,000 in the prior financial year.
Irby will retire at Aberdeen's annual meeting on January 22. He will be succeeded by Roger Cornick, who joined Aberdeen's board in January 2004. Cornick was with Perpetual for more than 20 years, serving latterly as deputy chairman.
Rifkind's remuneration edged up from £47,000 to £49,000 during the year to September 30.
Funds under management at Aberdeen, which employs more than 1900 staff worldwide, rose from £95.3bn to £111.1bn during the year to September 30.
Gross new business wins in the year to September 30 amounted to £21.8bn, down 4.4% from £22.8bn in the prior financial year.
Gilbert is believed to be keeping a close eye on potential acquisition opportunities amid the current turbulence in global financial markets.
