Gilbert steps aside as Standard Life Aberdeen ends joint chief exec structure

Martin Gilbert

Standard Life Aberdeen has bowed to calls to revise the co-chief executive structure that has been in place since the mega merger that formed the company two years ago.

Keith Skeoch, who entered the merger as heaad of Standard Life, will now take on the solo role of running SLA while Martin Gilbert, chief executive and founder of Aberdeen Asset Management will step aside.

There has long been calls for such a move and last month pressure for change at the top intensified after SLA’s largest shareholder dumped its 6 per cent stake in the business.

Shares in the Edinburgh-based financial services provider fell by 14¾p, or 6 per cent, to 233¾p in reaction to the move by the Japanese banking group, Mitsubishi UFJ Trust and Banking Corporation, that saw it offload its entire holding in SLA for a discounted price.

MUFG’s move brought the financial group’s total share price fall in the past year to 44 per cent.

Martin Gilbert, who will now become vice chairman of the group, will continue to chair asset management arm Aberdeen Standard Investments and sit as an executive director on the board.

His salary will remain at £600,000, but the maximum percentage of bonus payable to him will be reduced from 600 per cent to 350 per cent.

Skeoch’s pay will also remain unchanged.

The firm said opting for a sole chief executive, with Gilbert as vice chair, is “designed to strengthen our client focus, simplify reporting lines and put in place a structure which will facilitate robust execution of the next stages of our transition and transformation programme”.

Gilbert’s role recognises the “critical importance of his client facing responsibilities”, and he will be able to “focus solely on our strategic relationships with key clients, winning new business and realising the potential from our global network and product capabilities”.

Mr Gilbert’s reassignment comes after he used his annual appearance at the World Economic Forum in Davos in January to reveal that his time at the forefront of Scotland’s investment scene could be coming to an end, 36 years after founding, Aberdeen Asset Management, which merged with Standard Life in March 2017, creating Britain’s biggest asset manager, bringing together £610 billion of assets with clients in 80 countries and offices in 46.

Chairman Douglas Flint said: “A great deal has been achieved by both Martin and Keith to drive the business forward, and leave us well-placed for the future. The changes that we have announced today have the unanimous backing of the board.”

News of the leadership overhaul came as SLA announced adjusted profit before tax was £650m last year, down from £660 the previous year and earnings per share were 17.8p compared to 17.2p in 2017.

Assets under management and administration shrank from £608.1m to £551.5m, the firm said in its full-year results.

And net outflows continued, rising to £40.9m from £32.9m the previous year.

SLA announced a dividend per share of 21.6p.

Commenting on the performance, Martin Gilbert said: “In a tough year of continued change for our industry, we saw further net outflows - equivalent to about seven per cent of our starting assets.

“Yet as we have shown by our increased gross inflows, we continue to develop a business that has the scale and breadth to compete globally - and to continue to get closer to British savers through our growing platforms.”

“The investment company’s full year results are quite shocking with a decline in profit from continuing operations, another huge net outflow of money from its funds and no increase in the final dividend. That’s hardly the result Standard Life and Aberdeen were expecting when they got married in 2017,” Russ Mould, investment director at AJ Bell said.

“It quashes the idea that there is strength in numbers simply by parking two companies together.

“At the moment the focus still appears to be on cost cutting rather than driving the business forward. That needs to change.

“The decision to stop having two chief executives is definitely a good start as it should bring a tighter focus at the top of the company.

“Keith Skeoch can run the business while former co-chief executive Martin Gilbert has been relegated to maintaining strategic relationships and winning new business.

“The latter job description will drive speculation that Mr Gilbert’s days are numbered at the company.”

John Moore, senior investment manager at Brewin Dolphin Scotland, said: “Standard Life Aberdeen remains a business in a period of transition. While there is some good news in these results – cost savings from the merger are ahead of schedule and the business’s platforms attracted £5.3 billion of net inflows – there are still quite a few negatives too. Net outflows continued, adjusted profits are down, and assets under management fell during a volatile year for markets. In truth, it’s a mixed bag for Standard Life Aberdeen – part of that can be put down to it going through a great deal of change during a period of economic uncertainty and market volatility. However, there are reasons to be positive in the long term – the fundamentals of a strong business are there, if its management team can steer the ship through these choppy waters.”