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Nationwide’s planned £2.9bn takeover of Virgin Money has cleared a long-awaited hurdle after the building society’s members showed overwhelming support for the board at its annual general meeting.
More than 600,000 voters cast their ballots NationwideThe board received its endorsement at Wednesday’s Annual General Meeting, with each resolution – including board re-election and directors’ pay packages – receiving approvals of around 95 percent or more.
The Annual General Meeting was seen as a potential obstacle in the future. The inauguration Campaigners had urged members to vote against all resolutions in protest at Nationwide’s decision not to put the deal to a member-only vote. Although members were not asked to vote specifically on the deal, the AGM was seen as a vote of confidence in the mutual’s leadership.
Meanwhile, about 95 percent of voters approved of tripling Nationwide. Executive Director Debbie CrosbieCrosbie’s maximum long-term bonus is £3.4m. Remuneration committee chair Tracey Graham said Crosbie’s pay was “substantially below” peers at other banks and in the bottom half of the FTSE 100 index.
Wednesday’s meeting, which was held online, was open to Nationwide’s 16 million 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.
He Virgin Money AcquisitionIt will be the UK’s biggest banking merger since the financial crisis, making Nationwide the world’s second-biggest provider of mortgages and savings accounts and giving it a foothold in business banking.
In the last financial year, Crosbie took home £3.5m, including £1.7m in compensation for a bonus he lost when he left rival lender TSB.
Members also overwhelmingly approved a series of governance changes, including giving Nationwide’s chairman the ability to adjourn meetings, lifting the 70-year age limit for directors and eliminating a rule to disqualify directors with mental illness.
Mikael Armstrong, who is leading the members’ campaign to vote on the takeover, pointed to a “rise in member dissatisfaction with Nationwide’s leadership” which he said indicated the “disdain that has been shown” by members.
Despite the slight increase, votes against the board represented only a small portion of members. Nationwide chairman Kevin Parry said fewer than 200 people attended the virtual annual general meeting.
Armstrong, who claims he was “de-banked” by Nationwide in March, has collected more than 5,000 signatures on a petition urging the building society to give its members a say in the Virgin Money takeover.
Protesters have been arguing for months that Nationwide is “acting against the democratic spirit of a mutual society” and that it is not clear that customers will be better off after the deal.
Nationwide has insisted it is under no legal obligation to put the deal to a vote, and Crosbie told the Financial Times in May that only a “small minority” of customers were against the plan.
In relation to Armstrong’s claim about “de-banking”, the building society said it was complying with its legal and regulatory obligations and was “not aware of any instance where accounts were closed solely because of someone’s political comments or opinions”.
“Nationwide would never and has never de-banked anyone for any of their legally held views,” Crosbie told members.