Standard Chartered chairman defends staff bonuses

By Lawrence White

LONDON (Reuters) - Standard Chartered (STAN.L) would risk a staff exodus if it cut bonuses, Chairman John Peace said on Wednesday, responding to investor anger over high pay when the bank's shares have tumbled and there will be no final dividend for 2015.

At the bank's annual shareholder meeting, Peace was asked by one shareholder why Standard Chartered's overall incentive pool had only been trimmed by a fifth in 2015 while dividend payouts fell 83 percent and the bank reported a loss.

"...all I can say is if we were not to pay a bonus pool to junior staff and to managers who are highly marketable, we would not have a company," he said.

Some prominent investors have said they will vote against the bank's new pay policies, joining a wider revolt among shareholders over soaring executive pay levels at a number of British companies, including BP (BP.L).

Royal London Asset Management has said it would vote against the 2015 remuneration report at Standard Chartered, criticising high pension policies which it said boosts the level of pay unrelated to performance.

In the event, investor protest was muted, with only 9.5 percent of those who voted opposing the bank's 2015 pay report and only 5.5 percent opposing the new pay policy.

Standard Chartered reduced its bonus pool by 22 percent in 2015 to $855 million. The new policy approved at the meeting on Wednesday includes a performance-based incentive that pays Winters and other top executives up to 200 percent of their fixed pay if targets for improved returns are met.

PEACE OUT

Standard Chartered's shares are down 48 percent since June last year, when new Chief Executive Bill Winters took over with a mandate to repair the bank's balance sheet and restore revenue growth.

In February, the bank reported its first full-year annual loss in 26 years, hit by the costs of that restructuring and weaker commodities prices.

Winters said then that the bank would try to claw back bonuses paid to staff deemed responsible for its current woes, a process experts said would be fraught with legal difficulties.

But Peace said at the annual meeting that the bank was not pursuing clawbacks where executives followed the bank's risk and lending policies at the time, even if the loan subsequently turned bad.

He said clawbacks would only apply where there was "evidence of inappropriate behaviour."

StanChart said in February last year that Peace would step down in 2016, after giving Winters time to settle into his role.

Peace told shareholders the bank was making progress on finding his successor but had nothing more to report.

The bank has still not given an exact departure date for Peace, nor identified his successor.

(Reporting by Lawrence White; Editing by Sinead Cruise and Jane Merriman)