At the bank’s annual shareholder meeting, Mr Peace was asked by one shareholder why Standard Chartered’s overall incentive pool had only been trimmed by a fifth in 2015 while dividend payouts fell 83% and the bank reported a loss.
“All I can say is if we were not to pay a bonus pool to junior staff and to managers who are highly marketable, we would not have a company,” he said.
Some prominent investors have said they will vote against the bank’s new pay policies, joining a wider revolt among shareholders over soaring executive pay levels and bonuses at a number of companies, including BP and CRH.
Royal London Asset Management has said it would vote against the 2015 remuneration report at Standard Chartered, criticising high pension policies which it said boosts the level of pay unrelated to performance.
In the event, investor protest was muted, with only 9.5% of those who voted opposing the bank’s 2015 pay report and only 5.5% opposing the new pay policy.
Standard Chartered reduced its bonus pool by 22% in 2015 to $855m(€740.7m).
The new policy approved at the meeting yesterday includes a performance-based incentive that pays top executives up to 200% of their fixed pay if targets for improved returns are met.
Standard Chartered’s shares are down 48% since June last year, when new CEO Bill Winters took over with a mandate to repair the bank’s balance sheet and restore revenue growth.
In February, the bank reported its first full-year annual loss in 26 years, hit by the costs of that restructuring and weaker commodities prices.