The chief executive of Schroders will donate his performance-related bonus for 2020 and some of his salary to the coronavirus relief effort, just weeks after the UK asset manager came under scrutiny after calling for company bosses to “share the pain” of the pandemic.
The UK’s largest-listed fund manager by market capitalisation faced calls to “lead by example” after backing pay cuts at businesses that are struggling with coronavirus, while its chief executive Peter Harrison was paid £6.5m for 2019.
Schroders, which is a big investor in UK companies, said on Thursday that executive directors would give up their entitlements to their 2020 long-term incentive plan, while board members would donate three months of their fees. The London-listed company has also set up a “collective action” scheme to enable all employees to voluntarily donate up to a quarter of three months’ salary.
Bosses across other industries have taken pay cuts or donated parts of their salary in response to the pandemic, but so far few asset managers have taken similar action. Last week, Amundi chief executive Yves Perrier became the first asset management boss to announce he was giving up part of his pay to support the coronavirus relief effort.
In a letter sent to UK companies earlier this month, Schroders said it would support ailing businesses that sought to raise additional capital quickly or suspend dividends, but in return it expected those businesses to “reconsider management’s remuneration”.
While Schroders had backed pay cuts at companies that had been significantly hit by the pandemic, the asset manager said its own business “has proven to be resilient” despite extreme market volatility. It is not seeking any government assistance globally, furloughing any employees or enacting any related redundancy programmes.
In a trading update on Thursday, Schroders reported net inflows of £30.4bn for the first quarter, largely thanks to a £29.5bn mandate from Scottish Widows that had already been announced.
Overall its assets under management dipped 6 per cent to £470.5bn during the three months. This compares with significantly steeper declines at rival fund houses such as Jupiter Asset Management, where assets fell by 18 per cent during the first quarter; and Swiss investment house GAM, where assets fell by 26 per cent to SFr35.7bn in the same period.
Mr Harrison said in a statement: “As an investor in many companies we remain actively engaged in supporting business through these extraordinary times with the aim of protecting the long-term interests of all stakeholders.”
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