AN influential advisory body has slammed bonuses at doorstep lender Provident Financial as “excessive” and suggested directors are being rewarded repeatedly for meeting the same condition.
Bradford-based Provident said chief executive Peter Crook’s total pay and benefits increased from £1.3m in 2010 to £1.5m in 2011, or £1.6m once changes in pension values were included.
PIRC (Pensions & Investment Research Consultants) advised investors such as pension funds and insurers to vote against Provident’s remuneration report its annual general meeting on May 2.
“Highest paid director salaries are at the top of the sector,” it said. “The overall incentive remuneration is potentially excessive in our view as was the case during the year under review.”
Mr Crook’s remuneration included a salary of £622,000 and cash bonus of £756,000.
Finance director Andrew Fisher’s total remuneration hit £1.2m, including a £444,000 salary and £450,000 cash bonus.
Total remuneration for executives increased to £3.8m from £3.5m a year earlier.
Provident lends to people who cannot access credit from mainstream banks. It recently said pre-tax profits for 2011 rose 12.2 per cent to £162.1m.
It has proposed salary increases of between 3.3 per cent and 3.6 per cent for its executive directors in 2012, taking Mr Crook’s basic pay to £650,000.
PIRC criticised Provident’s three incentive programmes – long-term incentive scheme, performance share plan and executive share option scheme – as having earnings per share (EPS) as the main performance condition.
PIRC said: “We do not consider it appropriate for directors to be rewarded more than once for essentially meeting the same performance condition.”
It added: “Based on the current brokers’ forecasts, the EPS targets are not considered sufficiently challenging.”
A Provident spokesman said: “Remuneration at Provident Financial recognises the robust performance of the business over a number of years.”
Investors rejected Provident’s remuneration report in 2009.