Chris Hill, CEO of Hargreaves Lansdown, has taken a pay cut as part of the investment and platform provider’s new renumeration policy.
Mr Hill’s total variable remuneration fell to £1.12m (2021: £1.96m) due to new bonus caps.
The majority of the pay cut came due to a reduction in the maximum annual bonus. In 2021 Mr Hill received a cash bonus of £1.17m whereas in 2022 this was cut to £578,000.
However, his gross basic pay rose in line with inflation to £700,000 from £648,000 in 2021, according to the firm’s annual report out today.
Under the new policy Mr Hill’s bonus opportunity for next year will be 400% of salary, with the target of reducing this to 200%.
The new remuneration policy was agreed in 2020 and will apply until the investment and platform provider’s 2023 annual general meeting.
Last month the firm also made a one-off ‘breathing space’ payment to lower paid workers that the firm concluded would be most impacted by the cost of living crisis.
Hargreaves Lansdown recently announced plans to expand its financial advice offering.
Hargreaves Lansdown has offered a Financial Planning service for many years but is aiming to move into new advice areas including digital and ‘augmented advice’ delivered by AI and expand its financial advice service more generally.
The investment and platform provider’s annual report released today said that the firm expects its new advice proposition to bridge the advice gap, leading to a “higher share of wallet as clients consolidate their savings and investments with us and increase retention as more choose to build lifelong relationships .”
Hargreaves Lansdown attracted 92,000 net new clients over the financial year, taking total client numbers to 1.74m.
Assets under advice fell by close to 9% year-on-year to £123.8bn (2021: £135.5bn) at 30 June, despite having reach a record high of £141.2bn at 31 December 2021.
Revenues also fell by 7.6% to £583m (2021: £631m).
Reduction in flows and client growth in the second half impacted the results for the year with profit before tax of £269.2m.
Mr Hill said the while short term the firm expects to see a continued hit to its results, it still expects to be able to hit its targets for 2023.
He said: “We are currently seeing, and for the period ahead expect to see continued, economic and geopolitical turbulence. This will continue to impact key drivers of our business including asset levels and investor confidence. We have supported clients through such events and period for many years and each time we have come through stronger. This time will be no different.
“The strategy we outlined in February 2022 will deliver outstanding client service, strong growth and returns and continued market leadership for HL. We are therefore confident that execution of this strategy by the highly experienced team we have assembled will deliver the metrics and targets we set out at our investor day.”
