Standard Life Aberdeen (SLA) has witnessed a "significant" shareholder revolt against the planned pay awarded to incoming chief financial officer (CFO) Stephanie Bruce.
Yesterday afternoon, shareholders of the £569bn asset management business voted with large majority - in most cases almost unanimously - in favour of all 14 tabled resolutions at its annual general meeting (AGM) yesterday (14 May), bar one.
Only 57.98% voted in favour of Resolution 5, "to approve the directors' remuneration report, excluding the remuneration policy".
A statement said: "Through engagement, we were aware that certain institutional shareholders were not supportive of specific aspects of the arrangements relating to the remuneration of the incoming CFO, as disclosed in the directors' remuneration report."
Due to join on 1 June, Bruce (pictured) is set to receive a basic salary of £525,000, compared with her predecessor Bill Rattray, whose basic salary was £450,000, as well as a package of company shares worth £750,000.
SLA said the increase was to attract someone of her "outstanding" calibre, used to the more consistent pay as was common in professional services, versus the asset management sector.
It said: "The reason we made this award was to allow us to attract a talented senior executive from outside of the investment management industry who was previously remunerated on a comparatively consistent annual reward package, without the significant deferral arrangements we apply."
But following shareholder feedback, Standard Life Aberdeen has attached performance conditions to her deferred share plan.
SLA has previously disclosed "efficiency targets" of at least £350m to be achieved by the end of 2020.
As £230m of those are yet to be realised, the remuneration committee has set Bruce a savings target of £175m - roughly 75% of the outstanding amount - at which point she will receive two-thirds of her award, receiving the full amount if the entire £230m cost-cutting is achieved.
"The committee believes these savings targets to be challenging, ambitious and stretching, and also central to the company's strategic transformation."
The group said it would continue to engage with shareholders on the issue.
"In the coming months, we will continue to engage with shareholders on the concerns raised on this resolution. In accordance with the UK Corporate Governance Code, we will publish an update on that engagement within six months of the AGM.
"We expect to seek shareholder approval for a new Directors' Remuneration Policy at our AGM in 2021 in line with the normal cycle for renewal."
Meanwhile, SLA has confirmed Simon Troughton and Richard Mully did not seek re-election and will have retired from the board. Longest-serving non-executive director Martin Pike will immediately take on Troughton's duties of senior independent director until a successor is found.
Pike and John Devine have been appointed members of the nomination and governance committee.