Why I’m voting against Nationwide’s bumper pay


Nationwide boss Joe Garner is paid almost £2.4m. A member since 1986 and This is Money reader thinks that's too much

Nationwide boss Joe Garner is paid almost £2.4m. A member since 1986 and This is Money reader thinks that’s too much

Nationwide member since 1986 – and This is Money reader – Richard Colbey voices his concerns over the building society’s pay.

Nationwide members receiving emails and letters encouraging them to vote at the upcoming AGM, might consider the society’s remuneration policy. 

Chief executive Joe Garner is now paid £2,372,000, a 3.5 per cent rise this year. 

The other three executive directors receive between £1.35million and £1.45million.

The second biggest building society, the Coventry, pays its chief executive £863,000 and its next highest director £558,000.

I have been a Nationwide customer since 1986. It can’t be that bad or else I would have left, but it has made numerous administrative mistakes with my accounts, paying compensation about ten times – and shown no sign of improvement since Garner’s 2016 appointment. 

Like most customers I have been inconvenienced by continuing branch closures, and think expensive advertising campaigns a waste. 

After the Nationwide’s last mistake, I started looking at the chief executive’s pay and wrote to the chair of remuneration committee, Lynne Peacock, herself paid £146,000 for attending nine meetings. 

Peacock predictably has a background in banking, including being in charge of the Woolwich when it was taken over by Barclays, which may make not make her the most impartial person to evaluate financial services bosses’ earnings fairly.

A reply came, ostensibly from Peacock herself. which said it would not ‘be fair to [directors] to for us ignore the wider market’.

While it is true that the senior directors of some big international banks earn more than Garner, he gets far more than those who run smaller, predominantly-UK based operations, with which I think he can more accurately be compared.  

Metro Bank’s Craig Donaldson is paid £801,000 and Shawbrook Bank’s highest paid director £988,000. 

Peacock’s other claim that senior people ‘in other financial services organisations, large and small, are usually rewarded more highly than similar roles at Nationwide’ is simply not true whether other building societies or medium-sized banks are used for comparison.

As substantial organisations go, building societies are about the easiest to run. 

They have a virtually captive base of mortgage customers. 

Even those not locked in tend to remain customers out of inertia, as my 33 years’ membership illustrates. 

There is little scope for tightly regulated building societies to innovate the way banks can. There is virtually no international aspect. 

All a chief executive needs is basic competence. Garner doubtless has that, but I don’t think the role needs a level of skill which could justify such high pay.

Despite Peacock’s concept of fairness, most people would find nothing inherently unfair in paying anyone less than  almost £2.4million. 

There is nothing at all to suggest removing Garner and replacing him with someone on half the salary would make the slightest difference to the amount the Nationwide had available to pay savers interest, or what it charges for mortgages, except it would at least be a saving on his pay.

Shareholder ‘rebellions’ over excessive pay have been seen recently at Barclays and Standard Chartered. 

Those disillusioned by the Nationwide’s pay policy can start a similar action by voting against the remuneration report and the reappointment of Peacock, if not Garner himself. 

Even if there are too many votes simply surrendered to the chairman to prevent there being a majority against these, a sizeable rebellion might make the Nationwide rethink its policy in future years.

  • Nationwide’s 2019 AGM will be held on Thursday 18th July 2019, at Manchester Central Convention Complex, Manchester M2 3GX. Members eligible to vote should have received a pack. It is possible to vote online or by post. You can vote online at nationwide.co.uk/agm2019 until 11am, on Monday 15 July 2019. Find out more in this leaflet from Nationwide.



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