Abrdn CEO receives $1.5m bonus amid Australia restructure

The restructure of abrdn’s Australian operations has been cited as a measure by the asset manager which enabled it to cut $198 million from its investment business, leading to CEO Stephen Bird receiving a $1.5 million bonus.

Last year, the firm announced it was moving to a distribution partnership in Australia with SG Hiscock as its wholesale distribution partner as well as moving management of its Australian equities funds to the company. This led to several departures including managing director of Australia, Brett Jollie, and portfolio managers Michelle Lopez and Natalie Tam.

Speaking last April, the firm said: “The decision to refocus the local abrdn business is in response to the increasingly competitive nature of the Australian market and the need for greater local scale to be successful in delivering the best outcomes for Australian clients.”

In its full-year 2023 results, the UK-listed firm said this was among several steps it had taken which led to cost reductions in its investment division.

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“In addition to our fund rationalisation strategy, we simplified our management structure, restructured our Australian operations, and refocused our equities and multi-asset franchises. These actions, taken in combination, resulted in the investments business comfortably exceeding its £75m cost-saving target with £102m ($198 million) in savings delivered in 2023.

“The £102m cost reduction in investments was driven by lower staff costs reflecting 8 per cent lower front/middle office full-time employees and reduced market data and outsourcing costs, partly offset by the impact of staff cost inflation.”

However, this is not the end of the process with a further 500 roles expected to be cut by the end of 2025.

“The group announced a new transformation program targeting an annualised cost reduction of at least £150m by the end of 2025. The bulk of the savings will be in non-staff costs. However, the program is expected to result in the reduction of approximately 500 roles. To achieve the desired simplification and cost savings, total implementation costs are estimated to be around £150m.”

Shares in abrdn are down by 22 per cent over the past year to 27 February, compared to losses of 3 per cent by the FTSE 100. 

Chief executive, Stephen Bird, who was appointed to lead the firm in September 2020, received a bonus of £786,000 ($1.5 million) and an annual salary of £875,000 to bring his total 2023 remuneration to £2.1 million.

However, abrdn stated it could have been as high as £6.2 million if all metrics had been achieved. 

Bonuses are decided on the basis of a number of financial and non-financial criteria, including investment performance, net flows, operating profit, strategic, environment and people, it said.

Commenting on the overall results, Bird said: “Over the past three years we have reshaped the business to fit the modern investment landscape. We now have content and distribution aligned to the products and services clients need, and we are better positioned for future growth.”