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Nationwide’s planned £2.9bn takeover of Virgin Money has cleared a long-anticipated hurdle after the building society’s members showed overwhelming support for the board at its annual general meeting.
More than 600,000 voters gave Nationwide’s board their backing at the AGM on Wednesday, with each resolution — including the board’s re-election and directors’ pay packages — receiving approvals from about 95 per cent or more.
The AGM was seen as a potential hurdle ahead of the takeover as campaigners had urged members to vote against all resolutions in protest at Nationwide’s decision not to put the deal to a dedicated members’ vote. Although members were not asked to specifically vote on the deal, the AGM was seen as a vote of confidence in the mutual’s leadership.
Meanwhile, about 95 per cent of voters approved the tripling of Nationwide chief executive Debbie Crosbie’s maximum long-term bonus to £3.4mn. Remuneration committee chair Tracey Graham said Crosbie’s pay was “substantially below” her peers at other banks and in the lower half of the FTSE 100.
Wednesday’s meeting, which took place online, was open to Nationwide’s 16mn members, as customers who have a current or savings account or a mortgage are known. As a building society, the lender is owned by its customers rather than shareholders.
The Virgin Money takeover, which will be the largest UK bank merger since the financial crisis, is set to make Nationwide the second-biggest provider of mortgages and savings accounts, and will give it a foothold in business banking.
In the last financial year Crosbie took home £3.5mn, which included £1.7mn in compensation for a bonus she forfeited when she left rival lender TSB.
Members also overwhelmingly approved a series of governance changes including giving Nationwide’s chair the ability to adjourn meetings, lifting an age limit of 70 for directors, and scrapping a rule to disqualify directors with mental illness.
Mikael Armstrong, who leads the members’ campaign to vote on the takeover, flagged an “increase in member dissatisfaction with regards to Nationwide leadership” that he claimed signalled members’ “disdain they have been shown”.
Despite the slight uptick, votes against the board represented only a small portion of members. Nationwide chair Kevin Parry said fewer than 200 people attended the online AGM.
Armstrong, who claims he was “debanked” by Nationwide in March, gathered more than 5,000 signatures on a petition urging the building society to give its members a say on its purchase of Virgin Money.
Protesters have spent months arguing that Nationwide is “acting against the democratic ethos of a mutual society” and that it is not clear that customers will be better off after the deal.
Nationwide has insisted it has no legal requirement to put the deal to a vote, with Crosbie telling the Financial Times in May that only a “tiny minority” of customers were against the plan.
In relation to Armstrong’s “debanking” claim, the building society said it was meeting its legal and regulatory obligations and was “unaware of any occasion where accounts were closed purely because of someone’s political comments or opinions”.
“Nationwide would never and has never debanked anyone for any of their legally held views,” Crosbie told members.
