St. James’s Place (SJP) was left reeling in 2019 after details of its opulent culture – paid for by customers – emerged.
The wealth manager has promised to change, but recent pay awards to its top executives have some wondering if the company has learned its lesson.
A whistleblower explained three years ago how the firm’s advisers were rewarded with lavish vacations and diamond-encrusted cufflinks – all paid for from fees charged by SJP to savers.
Bonanza: SJP chief executive Andrew Croft earned 4x more last year than in 2020
Following the revelations, the company has pledged to review its compensation and benefits.
But now the GM is earning as much as ever, and one of the city’s greats brought in to clean up his culture has made a quick exit.
Boss Andrew Croft pocketed £3.3m last year, SJP’s recent annual report revealed – more than four times the year before when the board took Covid cuts and the most since his predecessor, David Bellamy, pocketed £3.6million in 2015.
Croft has recovered 96.7% of his maximum bonus and 93.4% of his maximum long-term incentive bonus for 2021.
SJP said this reflected “the year’s strong financial results and excellent performance in meeting or exceeding the strategic objectives set by the compensation committee at the start of the year.”
In 2021, profits soared 50% to £401m.
Baroness Morrissey, dubbed the ‘town superwoman’ for achieving a successful career in finance while caring for her nine children, joined SJP’s board in early 2020.
Her appointment was seen as a step forward for the male-dominated company, and she pledged to help improve SJP’s culture, inclusion and diversity.
Early on, she criticized the wealth manager’s pricing structure for being too complex and promised to attract more female talent.
But after just 14 months, she stepped down to become president of investment platform AJ Bell. During her short spell on the job, she raked in £110,000, the annual report revealed.
Quick exit: ‘Town superwoman’ Helena Morrissey quits after just 14 months
Paul Manduca, who had led the board of Prudential and became chairman of SJP in May 2021, won £306,127 last year.
Andrew Speke, of the High Pay Center think tank, said: ‘Given that SJP should be doing all it can to prove that its culture has changed, awarding the chief executive the highest salary since 2015 does not is not a good sign that much has changed. This is all the more worrying in light of the colossal sums paid to Helena Morrissey to tackle this problem.
“Actions speak louder than words, and SJP will have to do a lot more to prove they have truly turned the corner.”
SJP has long been known for treating its customers well. The firm’s advisers frequently took their wealthy clients to exclusive restaurants, sports matches, or private tours of tourist destinations.
But what those clients didn’t necessarily realize, according to a former employee who recounted his time at SJP to The Sunday Times, was that it was all paid for out of their fees.
SJP charges more than many of its rivals – and the adviser said clients will often end up shelling out nearly half of their investment profits over time.
Clients were also unaware of how much advisors were rewarded for the money they paid. If advisors hit their sales targets, they received Mulberry bags and Montblanc pens.
Cufflinks, or brooches for women, were also distributed, ranging from blue to green to gold, depending on the rank of the councillor.
Top partners boasted diamond-encrusted 18k white gold cufflinks worth around £1,200, the whistleblower said.
And privileged advisers could land a place at one of the company’s overseas “conferences” – effectively a week’s vacation with unlimited champagne in places like South Africa, Zambia, the Japan or Egypt.
In 2020, Primestone Capital, one of SJP’s shareholders, launched a blistering attack on the company as it denounced “excessive wages” and poor performance.
Primestone noted that a quarter of SJP’s direct employees, excluding well-heeled advisers, earned more than £89,000, putting more than 600 SJP employees among the top 4% earners in the UK.
Intimidated by the customer outrage that followed the revelations, SJP vowed to get rid of all overseas business travel and ditch company “badges” such as cufflinks.
In its latest annual report, SJP said that over the past year it has been “focused on realizing our culture through visual representation and stories that demonstrate the values and behaviors that underpin our goal and our vision.
This included “widespread engagement with employees and the inclusion of values in our ongoing employee review process,” he added.
SJP also noted that the compensation policy was approved by 94.7% of shareholders at the 2020 annual meeting.
But James Daley, managing director of Fairer Finance, said: ‘If you’re trying to signal that you’re doing a culture change, it doesn’t seem like the truth if you keep distributing and even increasing the remuneration of the best team.
“The culture flows from the board down and what was happening at SJP was all about complacency and excess. If you are a client, this is not the kind of signal you are looking for.
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