6th April 2012
Mr Chris Pilling
Yorkshire Building Society
Yorkshire Drive
Bradford
BD5 8LJ
Dear Mr Pilling,
Thank you for sending your booklet Have Your Say it’s Easy. On page 19 you say that hearing what I think is extremely important so here are my thoughts:
I am registered with you as acting for my mother under power of attorney. The letter that you have sent is addressed to me and tells me that I am eligible to vote at the AGM and that if I can’t attend the meeting I can vote on-line or by using the attached form. The voting form has my mother’s name on it and says on the back that a member who has granted power of attorney can still vote by post or on-line themselves but that their attorney can only vote by attending the AGM in person.
This information is contradictory and confusing. Please can you clarify which piece of information is correct. If an attorney can only vote in person at the AGM then please can you tell me the reason for this. My mother suffers from Alzheimer’s disease and I have been appointed to act as her legal attorney in all financial matters. I used this power of attorney to transfer my mother’s cash ISAs to YBS. It would be nonsensical to ask my mother to sign the voting form and I cannot attend the AGM in person. You make a point on page 13 of how your support of the Alzheimer’s Society is one of your highlights of 2011 but in practice you appear to be discriminating against one of your members who has Alzheimer’s by making it extremely difficult for her vote to be counted.
Secondly, in the current financial climate, I am finding it quite difficult to understand how the total director’s remuneration has increased by 20% this year and the non-execs by 15%. I would be interested to know how this compares with the average pay increase for staff. I find it particularly surprising that you were personally paid a bonus of £156,000 in order to compensate for the bonus that you might have received from your previous employer. In my view this carrying forward of bonus is very poor practice and I note that this money which was paid to you in a single day is almost twice as much as your dedicated staff raised for charity in a whole year.
Thirdly, I think that your overall board level remuneration is far too high, particularly as YBS is a mutual society. I would like to introduce a member’s resolution on this matter at the 2013 AGM and I understand that I need the support of 500 members in order to do this. Please could you tell me if I have the right, as the attorney of a member, to obtain a list of other member’s contact details from you so that I can contact them for this purpose.
Finally, I am interested in attending a member’s forum mentioned on page 19. Please can you let me know if I am eligible to attend as an attorney of a member. If I am not eligible then please could you let me know why not.
Many thanks for your consideration of my points.
Reply from Yorkshire Building Society (1/3):
ReplyDeleteAGM
Thank you for your letter dated 6th April 2012 (which was not received until 13th April) addressed to Chris Piling, Chief Executive, regarding the Annual General Meeting ("AGM") of Yorkshire Building Society and in particular your concerns about your role as an Attorney, the level of Directors' remuneration and how to put forward a members' resolution at the 2013 AGM. Mr Pilling has asked me to respond on his behalf but I will ensure he receives a copy of our correspondence. I apologies that this letter will be received after the AGM and for the length of this letter however I have tried to address all your points comprehensively.
I note that you are an Attorney on your mother's account and you have received an AGM voting pack. Under the current Rules of the Society (which is the constitutional document of the Society), the only way an Attorney can vote on behalf of a member is to attend the AGM in person. The information on the reverse of the voting form is therefore correct and, as you have pointed out, the Voting Form (to appoint a proxy) is in the name of your mother. The covering letter is however addressed to you as Attorney as all communications on the account are addressed to you as Attorney.
I can entirely understand your frustration about this and it is certainly not our intention to make life difficult for members such as your mother. The Society's Rules are based on Building Society Association model rules. However, a new set of Model rules have recently been issued which we will review and consider whether these should be put forward for approval by members at a future AGM (possibly the 2013 AGM) - the Rules can only be changed by a Special Resolution passed by qualifying members eligible to vote. I believe that the revised model rules do make it easier for Attorneys to vote on behalf of members. Members will be kept updated with any proposed changes to the Rules.
Reply from Yorkshire Building Society (2/3):
ReplyDeleteWith regard to the bonus payment to Chris Pilling due to the timing of his arrival, Chris did not receive any bonus from his previous employer, HSBC, for 2011 and was unable to accept deferred bonus payments due from HSBC from previous years. The Board considered that Chris was an outstanding candidate and the best person to take the Society forward in the continuing challenging environment and believed that making a payment on his joining the Society was wholly justifiable in the circumstances. It is not uncommon
to compensate incoming senior executives for such lost earnings on joining a new organisation.
Chris therefore received a payment which was equivalent to 40% of his ‘lost’ HSBC bonus with the remaining 60% deferred over the next 3 years in equal instalments. These deferred elements are subject to future Society and individual performance conditions and this is the same process as for the other executive directors. The details of the bonus payment are set out in the Summary Directors’ Remuneration Report contained in the AGM Pack.
With regard to the percentage increase in the level of directors’ salaries and fees; the executive directors received an average increase of 3.6% which was effective from 1 May 2011. Non-executive directors received an increase of 3% with effect from 1 July 2011. The increase for other staff was in the range 2.8% to 4.8% depending on personal performance. Thus the increases were in line with those give to our staff.
The reason why the total directors’ remuneration is higher than the above figures is partly due to a change in directors between 2010 and 2011 so the comparisons are not necessarily on a like-for like basis. Further, the published figures refer to amounts received in a financial year whereas the pay review periods are part way through the year as indicated by the dates quoted above. In mid 2010 for example, the directors received a greater increase than in mid 2011 and again this skews the year on year comparisons.
I hope you will acknowledge that whilst this may not necessarily allay your concerns on Director’s remuneration entirely, the Society does consider this issue very carefully to satisfy itself that the level of reward offered is appropriate to the performance of the Society and its relative position in the market.
Reply from Yorkshire Building Society (3/3):
ReplyDeleteYou have also enquired about how to introduce a members’ resolution at the 2013 AGM. The Society’s Rules enable members to submit what is know as a members’ resolution. The resolution and the required number of members to support it (see below) must be received by the Society by the end of the preceding financial year (ie. By 31.12.2012 for a resolution to be considered at the 2013 AGM).
If a member wants to submit a resolution then it is a matter for the member to ensure that the procedure set out in the Rules is followed. A copy of the Rules can be found at http://www.ybs.co.uk/your_society/about_ybs/rules_memo.html
If you required a paper copy, please let me know.
Rule 33 sets out the process, (including the number of qualifying members required to support the formal submission of a notice of intention to submit a resolution) to have a (valid) resolution proposed at the AGM. This notice should include the wording of the proposed resolution. The Rule also refers to the timescales involved as mentioned above.
As you will see from Rule 33(1), the notice has to be accompanied by the support of at least 500 Qualified Members who are at least 18 years on the date on which notice is received by the Society (‘Qualifying Date’) and are either:
A Shareholding Member (i.e. saver as opposed to depositor) with the Society with a minimum aggregate balance of £100 for a continuous period of 2 years ending with the Qualifying Date; or
A Borrowing Member with the Society with a minimum aggregate balance of £100 for a continuous period of 2 years ending on the Qualifying Date.
I would also refer you to Rule 38(2) relating to joint Shareholding/Borrowing Members; where an account is held in joint names then only the first named (i.e. the Representative Joint Shareholder/Borrower) counts towards the 500 members referred to above.
Should a notice be submitted then the Society would be obliged, amongst other things, to check the validity of the members supporting the notice to ensure that it complied with Rule 33(1). As it would be impossible for the Society to properly identify members based just on their signatures, which in some cases can be almost indecipherable, we ask that members also include alongside each signature, each member’s full name, address including postcode (plus any other address in the last 2 years) and either the member’s account number or date of birth. These will help us properly authenticate the members signing the notice.
The Society’s register of members is not a public document due to confidentiality requirements and Data Protection issues. There is therefore no general facility for access to the register. However, under Building Societies Act 1986, a member (subject to meeting certain qualifying conditions) can apply to the Financial Services Authority (FSA) to obtain names and addresses from the register where the proposed communication to members relates to the affairs of the Society and be in the interests of the members as a whole. For further information about this process and the requirements of the FSA, please have a look at the FSA website at http://www.fsahandbook.info/FSA/html/handbook/BSOG/1A and in particular I would refer you to sections 1A5. 10 – 15.
With regard to your questions about the Member Forum I can confirm that the Forum is intended for members only. However, I have passed your details on to the department who deals with this as it may be more appropriate for you to be invited to any ‘Question Time’ meeting that we might hold in your area in the future.
I would like to thank you for taking the time to put forward your views on this issue as the Society always welcomes feedback – positive and negative. If you have any further queries please do not hesitate to contact us again.