The majority of building societies, or 49 out of 63, do not give their members the chance to approve – or disapprove of - their chief executives pay, ignoring best practice in the corporate sector.
Donald Davey, chief executive of the Penrith Building Society in Cumbria was paid over £154,000 last year including pension contributions to lead one of the smallest mutuals in the market, with no approval from members, .
Chief executive of the Nationwide Building Society, Philip Williamson, with a membership of over 10 million, was paid £283,000 last year. (see salary table below)
Broadly speaking, many of the bigger lenders including Nationwide, Yorkshire, Britannia, Coventry, Skipton, Portman and Chelsea give their members the chance to veto pay arrangements. The Dunfermline, Norwich & Peterborough and Newbury also do their best to follow best practice.
Adrian Coles, director general of the Building Societies Association (BSA), said: “There are two issues here. The first is transparency and the second is the voting arrangement between building societies and their members.
Building societies should be transparent and we encourage our members to publish these details in their financial statements. But as far as the voting is concerned, there is no legal requirement for building societies to do this as Parliament concluded there was less ‘fat cat-ism’ with no shareholder’s rights in the building society world.”
He added: “However, as the largest 14 Societies have already set a precedent with voting rights, I expect the vast majority will also put a vote in place this year.”
Building society CEO salaries
By size
(1) - Nationwide BS, Philip Williamson, £283,000
(29) - Darlington BS, Peter Rowley, £151,752
(38) – Marsden BS – Neil Shoesmith, £89, 000
(55) – Penrith BS – Donald Davey, £154,000 last year - £67,090 and £87,493 pensions contribution
