Jim Armitage: This is a curious way to set an example to others on pay

Standard Life is always keen to do battle with corporate fat-cattery wherever it rears its ugly head. Just ask Sir Martin Sorrell.

But the company doesn’t fare overly well when today’s succession is viewed through the same corporate governance lens.

First, it promoted its number two to number one without engaging headhunters for a full external search. Fund manager Keith Skeoch is doubtless an excellent candidate. But how do they know there’s no one better if they don’t look?

Second, the outgoing boss, David Nish, will still get considered for a bonus during his six months’ gardening leave. Why should Standard Life shareholders pay him a bonus for mowing his lawn?

And third, the company says that, because of his relative lack of experience, it cut Skeoch’s salary compared with Nish’s from £835,000 to £700,000. Yet his long-term incentive plan (another type of bonus) is monstered up from Nish’s 400% of salary to 500%.

So, although he “loses” £135,000 on his basic pay, he gains a potential £700,000 on his LTIP.

Standard Life says top investors are happy with the former fund manager’s bumper deal. And who might those individuals be? Er… other fund managers.