Can Standard boss survive change of Life; Chief Sandy Crombie and his boardroom colleagues face a rough ride at their AGM and afterwards when they demutualise.

Byline: BY JOHN PENMAN 

STANDARD Life chief Sandy Crombie and his boardroom colleagues are eyeing the calendar nervously as they count down to the group's annual meeting on April 26They know they will be in for a rocky ride from four groups: #Members fighting the board's plan to scrap their mutual status and become a stock market listed company.

# Policyholders who have seen their pensions and life savings slashed after a series of investment blunders and months of haggling with Britain's financial watchdog, the FSA. #Critics of the bumper pensions being handed out to Crombie and his colleagues. The chief executive's total pay package has soared by 172 per cent over five years, while payouts to policyholders have been cut three times. #Homeowners with endowments which will not pay off their mortgages; almost1 million policyholders now face a shortfall and the group can no longer afford to keep their promise to make up the difference.

All this uproar is hardly surprising since the business has been struggling for the past three years.

Now, insurance industry insiders are starting to ask how long Crombie and his 'clan' can survive the planned stock market float.

Crombie, who joined Standard Life 38 years ago, was catapulted into the top job last year when it became obvious that the company could not survive in their traditional form.

When Standard Life fought off carpetbagger Fred Woollard five years ago, Crombie was a staunch defender of their mutual status.

Yet he U-turned and told reporters last month that he was 'deeply committed' to delivering the benefits of de-mutualisation, claiming that it would 'deliver maximum value to members'.

But the big stock market investors who will own most of the company from next year might not be equally committed to the chief executive unless there is a dramatic turnaround in the company's performance.

In 2000, the with-profits fund - where most of Standard's 2.6m members put their money - was worth about pounds 40billion. Now its value is about pounds 30billion.

Part of that fall is the fault of the three-year slump in world stock markets which took a big bite out of every life and pension fund.

But Standard Life suffered more than most with a disastrous investment policy - hanging on to shares for months after other funds had bailed out.

And after the Equitable Life scandal - which uncovered a pounds 2billion investment shortfall - the regulators at the FSA have ruled that Standard Life need much stronger finances.

That, in a nutshell, is why the board say they have no alternative but to abandon mutuality and float on the stock market.

But it's not just Standard Life's investment performance that has been a shocker. Sales have also been disappointing.

Sales at Aviva, the Norwich Union group which is Britain's biggest life and pensions outfit, were eight per cent up last year. Legal & General did better, up 14 per cent, while the Pru grew by 10 per cent.

How does Standard Life compare? Sales of insurance products rose by about nine per cent, but UK sales fell by two per cent.

Last month the Pru sacked chief executive Jonathan Bloomer; investors were disappointed by the sales performance and angered by a series of management blunders.

And some investors and financial advisers are also worried by the scale of Standard Life boardroom pension plans.

Sandy Crombie was paid a total of pounds 682,000 last year, pounds 200,000 less than he was entitled to under a bonus scheme. But his pension pot has been topped up by pounds 2million to total pounds 6.67million.

That means he will retire on a pension of pounds 388,000 a year - or more than pounds 1000 a day.

But a policyholder who has saved pounds 200 a month in a Standard Life pension for the past 20 years and retires now will collect about pounds 22 a day - a fiver less than someone retiring on the same terms three years ago

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UNDER SCRUTINY: Standard Life's Chief Executive Sandy Crombie