Trade minister in line for £4m shares bonus from bank
By Daily Mail Reporter
Last updated at 1:45 PM on 14th April 2009
The Trade Minister is set to receive £4million in shares from the bank
Standard Chartered, it has emerged.
Lord Davies stood down as chairman of the bank in January after he was
appointed by Gordon Brown.
But he is still eligible for the bonus of 426,000 shares - worth
£4.2million - which will be awarded if the bank hits its targets in the
next few months.
They would also be placed in a blind trust to avoid any conflict of
interest while he is a Government minister.
The bank's annual report says Lord Davies has 'entered into a personal
arrangement with an independent trustee under which he has agreed that
such awards can not be exercised without the written authority of such
trustee for the duration of any appointment that he might have in the
Government'.
However, the possible payout is still likely to add to the controversy
over bankers' bonuses.
The Government has been under fire since February after it emerged
former Royal Bank of Scotland boss Sir Fred Goodwin has been given a
£17million pension.
Lord Davies' payout could yet double if Standard Chartered's share value
returns to previous highs of nearly £20.
The 56-year-old was paid £650,000 last year and already owns another
33,000 shares in his own right, according to the annual report.
But he was not given a pay-off when he left and chose to take up a
reduced £117,000 pension early.
He is not paid for his work as Trade Minister.
A spokesman for the Department for Business Enterprise & Regulatory
Reform said the blind trust meant Lord Davies had 'no control over
shares and has no knowledge of what happens to them.'
He added that the peer had made a full disclosure of his interest to the
Cabinet Office and BERR permanent secretary Brian Bender and was
confident there is no conflict of interest.
Standard Chartered is the world's leading emerging markets bank and
plays a vital role in financing global trade.
The bank's accounts also revealed chief executive Peter Sands was paid
£4million last year. Finance director Richard Meddings was paid
£2.7million.
The highest paid employee was Karam Butalia, the global head of private
equity who was paid £16million when he left last year.
Standard Chartered has not received any Government money as part of the
banking bailout to prop up the banking sector.
In fact, Mr Sands and Mr Meddings played a key role in devising the
rescue plan after coming up with a proposal which they outlined to
Treasury officials.
The bank launched a $3billion rights issue at the end of last year to
boost its capital position so that it can cope with the downturn.
It later reported profits for 2008 of £3.4billion, up 19 per cent
compared to 2007.
Lord Davies was little known in the UK until he came back from Hong Kong
in 2001 to take charge at the bank.
He soon became one of Mr Brown's most trusted business advisers and his
subsequent elevation to the Lords was not deemed a surprise.
In the past, he has criticised large payouts to bankers. Last December,
he said: 'We need to make sure that compensation doesn't lose touch with
the rest of society.
'When you hear people were getting tens of millions for short-term bonus
awards, it seems to be out of touch with the returns and the risk.'
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Wednesday, 15 April 2009
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