Investor anger at YBS executive bonuses

THERE was anger among members at Yorkshire Building Society's annual general meeting yesterday over the bonuses paid to its executives.

The meeting, attended by more than 100 members in Bradford, was dominated by the question of whether three of the society's executive directors should receive bonuses totalling more than 150,000 after it posted a 12.5m loss in 2009.

Chief executive Iain Cornish decided not to accept a bonus. He saw his total pay, including taxable benefits and accrued pension, fall from 357,000 to 355,000 last year. But he told members that his decision did not reflect his view of the performance of the society. Ian Bullock, sales and marketing director, Andy Caton, corporate development director, and Andrew Gosling, finance director, each received bonuses between 46,000 and 56,000.

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Although 90.5 per cent of members voted for the directors to keep their bonuses, many of those who attended the meeting questioned whether it was right.

Don Smith, 81, from Filey, said: "The board has made a mistake about this. They had a good lead from Iain Cornish and then decided to take their bonuses."

He also questioned the practice of voting on a decision which has already been made. The directors in question have already received their one-off payments. "They have called us here to vote on something we have no power over whatsoever," he said.

"Another member said: "The average salary in Bradford is about 25,000 so when you've got a company paying six figures, that's a lot of brass."

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Another member added: "I believe this is outrageous. Someone has to take a stand here."

Chairman Ed Anderson replied: "I respect your views but I don't agree we should unilaterally set a new benchmark. We have to operate in the world in which we live and we are mindful people can move and do move jobs. Overall levels of remuneration are correct given the market."

He added: "These last two years have been the most difficult anyone has experienced in the financial markets and the fact we have come through it is testament to the people we employ."

Mr Cornish said the reason for YBS's loss was because the society, which has 23bn of assets and 2.1m members, was protecting its savers from the effects of the recession.

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He said it moved into profit in the second half of 2009 and has continued to make a profit in 2010.

He insisted that its capital position makes it among the UK's strongest financial institutions and it maintains a high level of quality liquid assets.

YBS, which is merging with Chelsea Building Society to create the UK's second-biggest mutual, is the latest mutual to face its members.

Skipton Building Society held its AGM on Tuesday.

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