Nationwide: pay us like us bankers – just don’t hold us accountable like bankers
Kalyeena Makortoff, writing in The Guardian today, has highlighted Nationwide’s blatant double standard when it comes to executive pay.
Nationwide is arguing that its executives should be paid in a comparable way to executives at large UK banks, but as Nationwide is a building society, members should not be granted a binding vote on the remuneration policy (as is the case at large UK banks).
Many members would baulk at the idea that a mutual society CEO should have the opportunity to earn £6.9m in a single year (a recent subject of Private Eye’s number crunching). Nationwide’s CEO is already the most highly paid building society CEO in history.
Some members may even be motivated to vote AGAINST the remuneration report and remuneration policy at (or ahead of) the upcoming AGM. However, these votes are advisory and non-binding i.e. the board and society can choose to ignore these.
The Guardian article neatly portrays Nationwide as a building society taking advantage of a loophole. Rather than acting like a mutual society, and in the interests of fairness, by putting remuneration to a binding vote of its owner-members, the society instead is arguing that as it’s not a listed company, and has no shareholders, it’s not required (by law) to offer members a binding vote. So instead of doing the right (i.e. moral) thing, it side-steps it. The double-standard is astonishing. Nationwide is effectively saying “we’re not a bank, but pay us like bankers – just don’t hold us accountable like bankers.”
Nationwide is effectively saying “we’re not a bank, but pay us like bankers – just don’t hold us accountable like bankers.”
James SHerwin-Smith, james4nationwide.co.uk
Questions members may want to consider before voting, or ask at the AGM
I also have to question why Nationwide’s board thinks that its executive should be paid in a comparable manner to those working at shareholder-owned banks. For example:
- £6.9M for the CEO is 280x what a junior employee is paid. How is this appropriate?
- Nationwide is not listed, so the executive management task is lower, and the individuals are less accountable (remuneration votes are non-binding). Why should executives be paid similarly to a listed company?
- Nationwide is building society, and as such it is a much simpler and less risky business than a bank e.g. it does no/very little wholesale, corporate or investment banking (and nor should it). Why should executives be rewarded similarly to more complex and riskier banks?
- Nationwide is a mutual. Why are performance benefits not accruing to members rather than executives?
The Quick Vote props up the approval rate
Note that Nationwide has offered an advisory vote on remuneration since 2003. It instigated the Quick Vote in 2006 (which encourages members to give their vote to the chair). The approval rate immediately jumped from <75% the year before to almost 95%, and has remained >90% most of the time.
Since the Quick Vote was introduced, member turnout has been in decline
Note that since the introduction of the Quick Vote in 2006, despite increasing membership, the number of members that turn out to vote has been in long term decline. Why vote when the board is almost guaranteed to get its way? See Nationwide AGM 2025: the illusion of governance and the futility of membership for more.
Debasing the membership (part 1): Nationwide’s virtual-only AGM
In the last few days, Nationwide members will have received the Chairman’s letter 2025, inviting members to vote and attend this year’s virtual-only Annual General Meeting (AGM).
One claim that stood out for me and I wanted to check its veracity:
“Since we made the meeting online, we’ve had the highest member attendance for over 10 years.”
The executive summary: it’s doubtful whether this statement is true. It is more likely that there was higher member attendance when the AGM was run (for 20+ years) with parallel in-person and online formats — what most building societies refer to as the “hybrid” format.
Worse, despite stated desires to drive “greater engagement” from the membership, a switch to a virtual-only AGMs is likely a mechanism deliberately chosen to restrict member-led challenge and action, and will likely result in the opposite outcome. Virtual-only attendance of the AGM in 2024 was already down 14%, the year after it’s introduction.
1. The Nationwide AGM has been available “online” for at least 25 years (started c. 2000)
It has been possible to attend the Nationwide AGM online since at least the year 2000 – see this archive page which states the AGM “was broadcast live on the Internet, is now available as an archived webcast” (sadly the link to the archive no longer works). I’ve not been able to find any information on how many members have historically joined the meeting online, but I’m aware of viewing facilities being setup in branches across the country to allow members to join who were unable to attend in person, but didn’t have the necessary technology or know-how to join a virtual meeting unaided.
2. In-person attendance varied depending on the AGM venue
In-person AGM attendance was the norm from the very origins of the society, and AGMs were typically held in London. At the end of the last century, the Royal Lancaster hotel was the preferred venue. I’ve heard apocryphal stories from this era of members availing themselves of anything “consumable”: from plates of biscuits being tipped into handbags, to the WCs being stripped of all toilet paper.
Whether related or not, from 2004 the society experimented with taking the AGM on the road to various regional convention centres.
The result: the more “regional” the venue, the lower attendance. In one case (Gateshead) the attendance was less than 100 members. Attendance was clearly strongest when the AGM was held in London (probably due to population density, attractiveness of location, and the ease of transportation), with in excess of 500 members attending each time it was held in the capital.
3. 2020-21: Covid years and a rule change
Covid protection measures, lockdowns and social distancing meant members could not attend the AGMs in 2020 and 2021, which were virtual-only affairs by necessity. A small number of member-colleagues present ensured quorum was met.
The society tabled (and the members approved) a special resolution at the 2020 AGM to adapt the society’s rules given the exceptional circumstances (a global pandemic).
To quote the then chairman, David Roberts:
The fifth resolution is a special resolution to amend the Rules of the Society as stated in the Notice of AGM. This resolution is a direct consequence of the coronavirus pandemic, which has highlighted the need to update our Rules for the benefit of members.
David Roberts (Chairman) speaking at the Nationwide Building Society Annual General Meeting, 16th July 2020
The first change we are proposing is to be able to hold meetings allowing both a physical and digital presence of members. Although this rule change will help us at times like the present, we believe that giving members the option to attend meetings online as well as in person will increase member engagement, allowing those members who can’t easily travel to a meeting in person to attend digitally. I would like to stress that, unless there are exceptional circumstances, the intention will be to hold a combination of both physical and online meetings and not an exclusively virtual or online meeting.
4. 2022: Nationwide’s first (and only) “hybrid” AGM?
The society’s press release announcing the results of the 2022 AGM hailed its “first hybrid AGM”:
This year, the Society held its first hybrid AGM with members able to attend in person at Nationwide House [Swindon HQ], and able to fully participate online, including voting and asking questions by video or text. Members were able to submit questions in advance of the meeting by email and post.
Given members had been able to join the AGM online for over 20 years by this point, the “first hybrid” claim is a little odd. The only distinction that could perhaps be drawn is the level of participation i.e. the ability to ask questions by video, and vote live in the meeting, given online voting and submitting questions in advance had been available for years, if not decades.
5. 2023 to date: Virtual-only AGMs
One year on from its first hybrid AGM in 2022 (and just three years on from David Roberts’ 2020 AGM pledge to the members that “exclusively virtual or online” meetings weren’t the intention), the new chairman, Kevin Parry, introduces the virtual-only 2023 AGM to complete a classic banking bait-and-switch:
This AGM is fully online and builds on our experience from last year. We discovered then that many more people attended online than made it in person, almost ten times as many in fact, and they were just as able to ask questions and vote as the people who were in the room.
Kevin Parry (Chairman) speaking at the 2023 AGM, 19th July 2023
Further, in response to a member question from the (virtual) floor:
…the question I think substantively: why are we holding it virtually rather than in
person? It’s to allow participation. Currently, I’m informed that we’ve got over 350
people online, that’s the biggest attendance we’ve had in eleven years, and so it is to
allow greater engagement with people.
What was Parry’s comparison for in-person attendance? During Covid? Holding the AGM in Gatesehad?
Further, if AGMs attract 10x the number of members online than in person, then it is hard to defend the claim made in the chairman’s 2025 letter that “we’ve had the highest members attendance for over 10 years”, as a combination of in-person and online attendance must have been greater in all years bar 2021.
If online members number 10x the in-person count as per the chart above, the chairman’s claim simply isn’t credible. Further, suggesting virtual only AGMs allow “greater engagement” defies logic: how does shutting the door to in-person attendees, excluding those that might not have the digital knowledge or capability at home, increase participation?
The path chosen by Nationwide appears to be part of a multi-step strategy to reduce participation and marginalise members:
- Hold the AGM at unpopular times and in increasingly remote corners of the UK to reduce attendance
- Use the pandemic as an opportunity to change the rules of the society
- Restrict attendance to a virtual-only format, leveraging the rule change and the justification of lower in-person attendance brought about by a global pandemic
- Use the virtual-only format to exclude some members, restrict transparency and more actively manage the Q&A session.
- Further reduce member participation, engagement and power (e.g. Virgin Money disenfranchisement).
6. Nationwide is the only building society in the country to operate virtual-only AGMs
There are 42 building societies in the UK according to the Building Societies Association. Nationwide stands alone by refusing in-person AGM attendance. All other societies either offer in-person only or hybrid meetings. Further, in an effort to encourage member participation, they tend to schedule these at member-friendly locations and times.
7. Virtual-only AGMs worsen member participation and engagement
Digital exclusion issues aside, virtual-only AGMs support a degree of stage-management by the society’s board against the members:
- Instead of questions being answered in the order they are raised at an in-person AGM (i.e. queued at the microphone), questions submitted online can be vetted, re-interpreted and prioritised at the command of the chair.
- Questions can be pushed down the list and go unanswered in the time available.
- Members are denied full transparency into the questions other members are asking.
- There is no feedback mechanism: members’ can’t show their appreciation (or lack thereof) for the questions posed and answers given (i.e. cheers or jeers that use to be part of in-person meetings)
- Lastly, members are unable to meet and discuss matters with other members either side of the formal meeting i.e. virtual-only meetings restrict the opportunity for members to congregate, dicsuss and organise.
Combined, these factors likely result in worsening member participation and engagement, as members lose faith in the value of the AGM, as well as trust in the society and the board.
8. Legality of virtual-only AGMs is questionable
Virtual-only AGMs are not only flawed in terms of fairness and transparency. They may also be illegal. The Financial Reporting Council (FRC) challenged whether virtual only AGM satisfy the requirement of “place” (as stipulated in legislation) in its July 2022 publication Good Practice Guidance for Company Meetings:
I emailed the FRC to see if their guidance has changed since. It has not – see their reply below:
Our position on the interpretation of the law regarding AGMs has not changed since the publication of the July 2022 “Good Practice Guidance for Company Meetings.” Under the current legal framework, there remains some uncertainty as to whether s.311(1)(b) along with s.360A of the Companies Act 2006 supports virtual-only AGMs. As highlighted in the image within your email, this is due to the legal interpretation of the word ‘place.’
Given the uncertainty, companies authorised to run some form of virtual element under their Articles of Association continue to highlight a physical ‘place’ of meeting within their notice of meeting, indicating where the AGM will take place but, in many cases, may discourage shareholders from attending physically.
Our view is that companies should seek to maximise the participation and engagement of all types of shareholders on the register and, where appropriate, take advantage of technology to increase participation and engagement. As a result, in 2022, we, along with the AGM Stakeholder Group, created this guidance to assist companies opting for hybrid, virtual, or physical meetings.
Email response from the FRC, June 2025
Note that Nationwide is subject to the Building Societies Act (1986): the same lack of a definition of ‘place’ exists. The current UK government is also reviewing the practice, highlighting that virtual(-only) AGMs are not on firm ground from a legal perspective:
My department will also launch an ambitious consultation next year [2025] aimed at simplifying and modernising the UK’s non-financial reporting framework. Efforts to modernise will also include examining the potential for updating shareholder communication in line with technology and clarifying the law in relation to virtual AGMs.
Jonathan Reynolds, Secretary of State for Business and Trade (14 October 2024)
Private Eye’s number crunching and Nationwide CEO’s “best-timed gong”
Private Eye (issue 1652, page 8) draws attention to the award of a damehood to Debbie Crosbie, Nationwide CEO, under the title of “KING’S BIRTHDAY TREATS: Honours round-up.”
If you’re a Nationwide member, and don’t agree with paying a mutual society CEO 280x what a junior member of staff receives, you may want to use your vote ahead of the upcoming AGM.
Best-timed gong is the damehood for Debbie Crosbie thanks to her “advocacy for ethical banking practices and corporate responsibility”.
Within days of the announcement, Nationwide’s board said Crosbie, who already earns £2.4m, should have a bonus plan that could take it to £6.9m. She may be fortunate the envelope from the Cabinet Office arrived some time before the pay proposal.
NUMBER CRUNCHING
£24,750
Minimum salary for employees at Nationwide, under a newly agreed pay package.
£6.9m
Possible pay package for Nationwide’s chief executive, Debbie Crosbie, under a proposed new bonus plan
Nationwide AGM 2025: the illusion of governance and the futility of membership
With 17 million Nationwide building society members eligible to vote, more than some sovereign countries, the “modern” mutual’s 2025 AGM should be a leading example of democracy and corporate governance in action.
Instead the largest building society in the world exhibits contempt for its members by acting in an exclusive and autocratic manner. The outcome is largely a foregone conclusion: very few members attend the AGM, and voting turnout runs at 4% (of which 95% vote in favour). Monitors would classify such a general election result as more befitting an authoritarian, rather than democratic, regime.
Leadership can only be challenged once a year, at an inconvenient time, in a highly stage-managed, virtual environment.
Nationwide holds its Annual General Meeting mid-morning, mid-week, and at the start of the summer holidays. This prevents nearly all members from participating. Most mutuals choose venues, dates and times that raise engagement, not restrict it.
Nationwide is the only building society to operate a virtual-only AGM. The legality of such practice has been called into question by the Financial Reporting Council, while the government has called for a review. Meanwhile every other of the 41 building societies in the UK allow members to attend their AGM in-person. Some also include the option of joining online.
Nationwide instead chooses to: contribute to digital exclusion by denying attendance by those without the necessary skill or technology; employs a Q&A process that means questions can be filtered, screened from view or simply ignored completely; and effectively prohibits members from meeting and interacting with fellow members.
Alternative views are not tolerated.
Nationwide resisted a call for a vote on Virgin Money, the largest acquisition in its history, contrary to the spirit of the law. Nationwide opaquely deems member nominations for their own candidate as invalid or ineligible. Nationwide objects to applications to the FCA to access the member register (a statutory right). Nationwide refuses to allow members to submit nominations or resolutions through digital means (a particular double standard given its investments in technology, support for a virtual-only AGM and electronic voting).
There are no alternative candidates or resolutions on the ballot as a result. So instead of being able to vote FOR an alternative to the board’s recommendations, if you disagree, all you can do is vote AGAINST.
Voting outcomes are skewed by the “quick vote”.
Nationwide employs a prominent, and much criticised, “quick vote” option that makes passing initiatives that are not supported by the board almost impossible. It appears at the top of the paper ballots, and is the first option for electronic ballots (where selecting it makes all other options disappear). Over 80% of members choose to quick-vote, handing considerable power to the chair in support of the board’s recommendations. As a result, approval rates run at 95% or higher.
Even if members were to overcome the inherent bias of the quick vote, some agenda items (e.g. executive remuneration) are non-binding.
Less than 0.002% members attend the AGM. Turnout is just 4% (of which 95%+ vote in favour of the board’s recommendations).
Nationwide argues that this low level of participation is a good sign: members are perceived as mostly content with the status quo.
The alternative argument is that members recognise their participation is futile: the deck is so stacked against them having their say that turning up to the AGM or voting is a pointless, illusory exercise in governance.
Nationwide’s management and board pursue their agenda unchecked.
Members’ voices aren’t well represented and can be easily ignored or dismissed. Big decisions can be pushed through unchallenged. Adverse outcomes can materialise without consequence or accountability for the individuals responsible.
As the emphasis of the building society continues to shift towards ‘banking’, it gets harder to see the distinction between the verb and the noun — despite expensive, poorly-executed representations to the contrary.
The board meanwhile supports management in its quest: an expensive and unpopular acquisition, increasing executive pay and growing margins rather than passing on the benefit to all members (“fairer share” payments to a minority of members could be argued to more closely resemble distracting bribes than an equitable distribution of mutual profits).
Take action: Nominate a candidate to represent your views.
James Sherwin-Smith is seeking nominations from eligible members to represent member views at a board level. Nominate James today so that there is at least one member nominated candidate on the ballot next year.
“Have your say”: Vote AGAINST all measures.
In the meantime, with no alternatives available to vote for on the ballot, make your voice heard by registering your protest. Reject the quick vote option and instead vote AGAINST all ballot entries.
Rebels with a cause: standing on the shoulders of giants
Pictured: Shelia Heywood presenting a cheque on behalf of Nationwide to Buxton Mountain Rescue in 1989
As I canvass for nominations to support my own candidacy to stand for election as a Director of the Nationwide building society – I am naturally drawn to research those that have attempted this before.
Finding information on the who, when and why has proven an interesting research project. The online mutual society register maintained by the FCA has some big gaps in its records – I have requested that more are digitised. The society doesn’t maintain a large online archive of AGM results and minutes, annual reports etc. Few online news archives go back before the year 2000 (before the internet went mainstream).
Since 1980, I have only identified three candidates who were successfully elected to the board after receiving the requisite member nominations:
- Paul Twyman – elected to the board of the Anglia building society after several attempts and considerable activism. He served on the Anglia board from 1982, joining the Nationwide board at the merger in 1987 and continued serving until 2002.
- Sheila Heywood – elected after several attempts, who served on the Nationwide board 1988 until at least 1993. She was one of the first female directors of the society.
- David English – a former Nationwide manager who was made redundant the year before and I believe was elected at the first attempt. He served on the Nationwide board 1993 to 2002.
Note that all three served at the same time for a period from 1993 until Shelia Heywood stepped down.
I have also identified several candidates that secured sufficient nominations to be entered on the ballot at AGMs but did not receive sufficient votes to be elected.
[NB the following list may not be complete for the period 1992-1997 as I do not have a complete list of AGM voting results – entries for 1992 and 1993 were gleaned from newspaper reports filed at the time.]
- Vivian Singh (1992-93)
- Ben Jacobs (1992-93)
- Michael Hardern (1998)
- Andrew Muir (1998, 2001-02)
- Alan Debenham (1999-2005)
- Tim Tanner (2002-03)
I’m now searching to fill a gap in my research that picks up from where Michael Cassell’s book “100 years of Nationwide” leaves off and recent records (mostly online) begin.
FT article: What does it mean to be a building society member?
I am grateful to Akila Quinio who quoted me in this Financial Times piece published today regarding Building Society membership: What does it mean to be a building society member? (2 August 2024)
She asked me three questions given I am running for election to the board of Nationwide: my full answers are below.
If you’d like to support my candidacy, it’s a 3 minute task to complete a one page nomination form.
1. What are the benefits of being a member?
The mutual structure means that as a member you are a customer and an owner of the society – there are no shareholders. Membership therefore means the society should be solely focused on delivering the best outcomes for members in terms of the products and services it offers, and members have the opportunity to determine how the society is run and governed. Mutuals are an important competitive force and are a check and balance on the shareholder-owned financial services industry. (See separate article on this topic: “Why mutuals matter“.).
2. How much power does it give you?
Membership power is limited to what is enshrined in the memorandum and rules of the society, and to what is protected by law, primarily under the Building Societies Act (1986). In theory, members can change the rules of their society, call and attend general meetings, propose and vote on resolutions, nominate and elect board members. Over time, the democratic power of the mutual “one member, one vote” governance model has been steadily eroded (See how voting at the Nationwide building society has changed over time: “Why I believe access to the register is needed.”)
3. And are there any drawbacks?
The degree of influence that the membership has on society affairs is dependent on how active the membership is – if members are passive, and don’t exercise their powers, the organisation becomes increasingly autocratic. Take the recent Nationwide AGM as an example. There were no alternative member proposed resolutions or alternative board candidates. Voting turnout was less than 4%, and all but one of the resolutions and re-elections were approved at 95% or higher.
If Nationwide was a country (and with 16 million members eligible to vote, it has that scale), that election setup and result would be cause for alarm to any casual observer.
This is why I am seeking nominations from fellow members to stand for election as a director of Nationwide. I want to breathe more life into the membership model – with more members actively engaged. Nationwide is and should remain a mutual that is members owned, but it should also be run and governed accordingly. This is important for Nationwide, but also for the benefit of everyone in the UK, given its position as the largest mutual and the second largest mortgage provider.
A healthy, engaging and competitive Nationwide means better banking for all.