Standard Life, a critic of pay excesses in the banks, has come under fire from corporate governance watchdog Pirc for its own executive rewards.

Pirc highlighted the £3.7 million package for Keith Skeoch, chief executive of Standard Life Investments, which holds 3% of the UK stock market and monitors executive pay.

In an alert published ahead of Standard’s annual meeting in Edinburgh on May 17, Pirc says: “We consider that combined bonus and share incentive awards made during the year were excessive. In particular, combined awards made to Mr Skeoch amounted to over 750% of his salary.”

Mr Skeoch was again Standard’s best-paid director last year. His salary rose by 21% to £425,000, his first rise in five years.

But other benefits and a bonus of £1.4m took his total remuneration to £1.9m, on a par with chief executive David Nish and slightly below his haul of £2.1m in 2009.

Mr Skeoch’s award of 825,000 shares during the year under two incentive schemes outstripped Mr Nish’s award and took the total value of his package to up to £3.7m (at current share values).

Pirc said that during 2010 Standard Life had decided to base performance conditions for its long-term incentive plan (LTIP) solely on IFRS operating profits, rather than also using total shareholder return.

“We view the reversion to a sole performance target as a retrograde step,” Pirc says.

The separate Standard Life Investments LTIP was linked to investment performance and third-party business EBIT (earnings), paying the minimum for hitting 60% of target and the maximum for hitting 140% of target.

“The company does not disclose the specific EBIT hurdles, we cannot therefore independently assess whether the targets can be considered sufficiently challenging,” Pirc says. “We recommend shareholders oppose the remuneration report.”

A Standard Life spokesperson commented: “In order to support the revised strategic direction of the group, we have made changes to executive remuneration and have consulted extensively with key shareholders on this topic.

“The changes demonstrate that we set very stretching targets for our executive team and strengthen the link between performance, reward and strategy,” the spokesperson added.