Fund manager Abrdn has handed chief executive Stephen Bird a £800k bonus despite clients pulling out even more funds, leading to a slump in annual profits.
Bird’s total pay for 2023 came in at £1.1m, with the board approving 36 per cent of the maximum for his bonus – 26.5 per cent of which was due to “non-financial metrics”, including stakeholder engagement and ESG.
The bonus was first reported by Mark Kleinman, City reporter for Sky News on X (formerly Twitter).
The FTSE 250 firm said net outflows surged to £13.9bn in 2023, up from £10.3bn in 2022. Assets under management and administration slipped to £494.9bn from £500bn.
Net operating revenue was four per cent lower at £1.4bn, which the firm said reflected “the impact of outflows and adverse markets partly mitigated by the diversification in sources of revenue, including the benefit from higher treasury income.”
The group’s adjusted operating profit came in at £249m, down five per cent from £263m the previous year and in line with analysts’ estimates of £242m.
Abrdn declared a final dividend for the year of 7.3p, giving a full-year dividend of 14.6p per share, unchanged from 2022.
The results come amid a challenging period for the firm. Earlier this month, Harris Associates, a former high-profile investor in the business, reportedly sold its position in the company, saying it had lost faith in its management.
Abrdn was also forced to shut its once-mighty Global Absolute Return Strategies last year after assets dwindled from the tens of billions to just £1.4bn.
Bird has been on a mission to cut costs and simplify the business to improve performance. Last year the group sold off its US and European private equity arms and Abrdn revealed today that it had reduced costs by £102m in 2023, exceeding its £75m target.
The firm also confirmed today it would be making 500 layoffs as part of a new £150m profit-saving programme.
Bird reportedly pitched selling the company’s troubled investment management division in June 2022 but was vetoed by the board. He has since staunchly backed retaining the business.
“The investment industry faced further structural and macroeconomic challenges during 2023 with a ‘higher for longer’ rate environment across developed economies adding sustained pressure on most asset classes,” Bird said on Tuesday.
“Our balance sheet remains strong which enables us to fund our cost transformation while continuing to strategically invest in growth areas and maintain our dividend. There is significant work ahead, but we are confident we will be successful in delivering future growth.”