Yorkshire’s top building society bosses in line for £2.3m payout

From left: Skipton Building Society's David Cutter, Leeds Building Society's Peter Hill and Yorkshire Building Society's Chris Pilling
From left: Skipton Building Society's David Cutter, Leeds Building Society's Peter Hill and Yorkshire Building Society's Chris Pilling
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The chief executives of Yorkshire’s three largest building socieities were awarded a combined £2.27m in 2014.

Yorkshire Building Society’s Chris Pilling was handed a total remuneration package of £923,000, according to the mutual’s latest annual report.

Skipton chief David Cutter’s benefits totalled £763,000 for the year, while Leeds Building Society boss Peter Hill will take home £586,000.

The combined pay for the three executives was up marginally from 2013’s total awards, which were £2.255m.

Both Mr Cutter and Mr Hill saw a drop in payments, while Mr Pilling’s salary and bonuses climbed £53,000 compared to the previous year.

Former First Direct chief executive Mr Pilling, who joined Yorkshire Building Society on December 31 2011, will receive a total of £923,000 for his performance in 2014.

The award includes a base salary of £547,500 and a pension cash allowance of £87,000.

It also includes a proposed bonus of £243,500, which equates to 44.5 per cent of salary.

If approved, two-fifths of this will be paid in 2015, with the remainder deferred for payment across the next three years.

Members of the mutual will have the opportunity to vote on the proposals at the annual general meeting on April 21.

Around 90 per cent backed the 2013 proposals at last year’s meeting.

A spokesman for Yorkshire Building Society said it uses remuneration to attract and retain talent “within a competitive, national financial services market”.

He said: “We believe this will then enable us to deliver our vision and values in a financially sustainable way for the long-term benefit of customers.

If the bank and individuals have performed well, it is fair that they are rewarded for their achievements, he added.

In the year to December 31, Yorkshire saw gross lending up 13 per cent to £7.6bn and core operating profit climb 18 per cent to £178.8m.

However, group profit before tax down 5.5 per cent to £188.2m, in part due to regulatory costs.

The Financial Conduct Authority (FCA) issued a £1.4m penalty against the society for producing misleading material on structured deposit accounts.

A separate £4.1m fine was imposed for the mutual’s failure to identify customers with payment difficulties.

At Skipton, Mr Cutter is in line for a total pay package of £699,000.

The package includes £408,000 salary, up 2.5 per cent from 2013. A bonus of £195,000 has been proposed, equating to 48 per cent of standard pay.

Mr Cutter will receive £64,000 in bonus payments from previous years in 2014.

While the chief executive’s base pay has risen for 2014, the proposed bonus was down from £296,000 in 2013.

However, Skipton said the 2013 and 2014 awards are not comparable as the mutual changed its variable pay policy from January 1 2014.

A spokeswoman for Skipton said: “The remuneration of executive directors reflects the very strong performance of the group during 2014.”

Skipton saw a turnaround in its fortunes in 2014, after several difficult years.

Profits were up 75 per cent to almost £182m, while mortgage and savings balances both increased by over 11 per cent.

Mr Cutter’s remuneration package will be voted by members at its April 27 AGM.

Leeds Building Society chief executive Peter Hill saw his total remuneration package reduce by 3.93 per cent in 2014, receiving a total of £586,000.

Mr Hill’s base salary rose 2.5 per cent in the period, compared to an average boost of 2.96 per cent across the business.

A bonus of £203,000 has been proposed, amounting to 59.5 per cent of Mr Hill’s basic pay.

A spokesman said Mr Hill’s pay was set by the remuneration committee after considering “detailed evidence” to assess performance against corporate objectives.

Leeds’ 2014 annual results show healthy growth, with a 26 per cent increase in operating profit before exceptional items to £80.9m.

New mortgage lending rose 24 per cent rise to £2.7bn, resulting in a record £1bn net lending.

The mutual’s AGM will take place on Wednesday this week.

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Yorkshire’s building societies have emerged largely unscathed from the financial crisis and are continuing to grow as banks reassess their position in the market.

The sector has contributed significantly to new mortgage lending in recent years.

According to the Building Societies Association (BSA), building societies provided 26 per cent of all mortgage lending in 2014, with gross lending of £52.6bn across the year.

The market share is “well above” the sector’s usual level of around 19 per cent, the BSA said.

Last year, Yorkshire Building Society, which has total assets of £37.6bn, saw home loan borrowing up 13 per cent to £7.6bn. This represented a market share of 3.7 per cent.

At Skipton, gross residential lending climbed 23 per cent to £3bn.

Its mortgage book saw annual growth of 11.2 per cent to £12.7bn. Its assets rose to £16.1bn for the period.

Leeds Building Society experienced strong demand for lending, with a 14 per cent increase to £2.7bn. Net mortgage lending rose to £1bn, a record for the mutual.

Its assets were boosted by eight per cent to £12.1bn.