The independent action group for current and ex Equitable Life policyholders, funded by contributions.

Equitable Members Action Group

Equitable Members Action Group Limited, a company limited by guarantee, number 5471535 registered in the UK

Media Stories: 15/07/2007 - Press Coverage

Mail on Sunday, 15 July 2007

Jeff Prestridge, Financial Mail Personal Finance Editor

“The nine lives of misleading Equitable boss


Charles Thomson truly leads a charmed life as boss of struggling Equitable Life. Since taking over the helm in 2001, this Harry Potter character of the financial services world has survived a barrage of criticism from policyholders for enjoying fat-cat pay and leading the insurer into expensive and unsuccessful legal actions.

Thomson has not helped himself by indulging in what can only be politely described as a more than colourful personal life.

Despite all this, he has survived and thrived - unlike Equitable's diehard policyholders, who continue to sit on plans ravaged by the painful shoring up exercise he has conducted to put the insurer on a more stable footing.

Indeed, Thomson thrives like never before. Only last month, he picked up an annual 'discretionary' bonus of £199,305 plus a 'retention' bonus worth almost £100,000. The latter was paid merely for bothering to turn up to work. This bonus bonanza was on top of his basic salary, equivalent to £442,900 a year, and annual benefits that add up to £100,000.

Now it transpires that Thomson has avoided yet another banana skin on his way to a rich retirement.

This time, he has escaped with a 'reprimand' from the Scottish Faculty of Actuaries after his supply of a fake character reference when he first applied for a job at Equitable six years ago.

Thomson admitted this when under oath two years ago during Equitable's failed legal action against its former directors and former auditor Ernst & Young. Under cross-examination, he confessed to writing the glowing tribute to his personal record at Scottish Widows, where he ended up as deputy chief executive.

Thomson is an actuary by training, so he is meant to uphold the profession's high standards at all times. The faculty found him guilty of misconduct and bringing the profession into disrepute, but rather than expelling him, it decided only to reprimand him.

Expulsion would have made it impossible for Thomson to continue as boss of Equitable, but such drastic action was never on the cards. All the evidence suggests that the actuarial profession likes to look after its own.

In the past 20 years, only two fellows of the UK's main actuarial institutes, the Scottish FoA and the English Institute of Actuaries, have been expelled. Indeed, one was Roy Ranson, Equitable's former chief actuary, who caused the mess that led to Thomson faking his reference.

What is extraordinary about Thomson's rebuke is that it took the faculty nearly five months to publish details of its action.

The adjudication was made in February, but published on the profession's website only this month. Though no one from the faculty was prepared last week to explain the delay, it seems there was protracted 'negotiation' with Thomson as to the exact wording of the adjudication.

The faculty's procrastination has suited Thomson down to the ground as Paul Braithwaite, secretary of the Equitable Members' Action Group, was keen to point out last week.

If the adjudication had been published in February, he says, it would have given policyholders the chance to raise the matter at Equitable's annual meeting in May.

That opportunity, conveniently as far as Thomson is concerned, has now been lost. And I thought it was only cats that had nine lives.

On Friday, Braithwaite told Financial Mail: 'Why the board has continued to retain Thomson's services beggars belief. Members have consistently been given a raw deal.'

It is not an isolated view. Last week, a number of leading financial advisers called for his head, arguing that Thomson's position is untenable. Equitable, of course, sees things differently, saying the faculty's adjudication is 'not an issue'.

In a perfect world, Thomson would walk, but he won't - especially in light of the six-figure bonuses waiting for him between now and the end of next year, merely for remaining in Equitable's employ.

As for Equitable's board, there seems no desire to push him through the exit. Maybe its view is that Thomson, for all his faults and foibles, remains the best man for the job.

The sooner the Equitable Life saga is brought to an end by a sale of the remaining business to a rival, the better for everyone. If that means Thomson staying at the helm for a little longer, it might, just, be a price worth paying.

Charles Thomson reprimanded by Faculty of Actuaries

Charles Thomson, chief executive of Equitable Life, has been reprimanded by the Institute and Faculty of Actuaries for misconduct, after being found guilty of bringing the profession into disrepute over his faked job reference.

The decision of the profession's adjudication panel has only just been published, though the hearing took place place on February 22 and did not prompt the customary issuing of a press release on disciplinary matters.

Thomson protested to The Herald last night that the matter had been "completely trivial".

In a further twist, the complaint against Thomson is understood to have been brought by Chris Headdon, his predecessor and the man who hired him while allegedly in full knowledge of the job reference incident.

Headdon was given a public reprimand by the profession in March for his role in Equitable's near collapse.

The profession summoned Thomson to answer the charges after he appeared as Equitable Life's key witness in the ill-fated £3.7bn legal actions it brought against Ernst & Young and 15 former directors, which were abandoned in December 2005 after costing policyholders £45m.

Under merciless cross-examination from Ernst's counsel, Thomson had admitted in court in April 2005 that he himself was the author of the glowing reference to his "exceptional record of success" at Scottish Widows, where he was deputy chief executive from 1995 to 2000.

The reference concluded: "We will miss his intellect, integrity, and energy and feel sure he will bring great value to other organisations at the highest levels."

The adjudication panel said: "There was clear evidence that the respondent had in fact presented a character reference purporting to be from the chief executive of his former employer which he himself had written and which had not in fact been approved by his former employer."

Although Thomson had withdrawn the reference soon afterwards, he had given no indication that it was provisional. "Such conduct on the part of an actuary, particularly a senior member of the profession seeking a senior position, is prima facie a failure to comply with the standards of behaviour and integrity which the public and the profession might reasonably expect of a member. The conduct brought the profession into public disrepute."

It concluded: "However, the panel noted that the respondent was under considerable pressure, his departure from his previous employers having been announced on only the evening previous to the presentation of the character reference.

"The respondent withdrew the reference within a few hours on his own initiative. The respondent accepted that there had been misconduct and accepted a reprimand."

Thomson said last night: "This is all historical stuff. This is all concerned with three hours, six-and-a-half years ago, and it had nothing to do with my appointment to the society."

He said the incident had been "known to the nominations committee and was of no consequence".

He said that as a disciplinary matter it was "completely trivial", and that "it is actually quite hard to prove you are innocent".

Paul Weir, an Equitable action group campaigner, commented: "I note this was published after the society's annual meeting. I would like to know how he (Thomson) has kept his job."

Alastair Dunbar, spokesman for Equitable Life, said: "Mr Thomson was appointed by the society in full possession of the facts and his success at the society since then speaks for itself."

12:24am Saturday 7th July 2007


Money Marketing reports:

"Advisers have called on Equitable Life chief executive Charles Thomson to be sacked after he was reprimanded by the Faculty of Actuaries.

Ruth Whitehead Associates principal Ruth Whitehead says the publication of the Faculty of Actuaries ruling this week confirms he is unfit to be in his position.

Thomson was found guilty of bringing the industry into disrepute for faking the character reference from his former employer following a Faculty of Actuaries panel meeting in February.

Whitehead says: “It gives all of us a bad name. You have got to operate ethically and with integrity and with a strong moral position. We should do anyway, but particularly people at the head of large financial institutions. He should be sacked at least.”

Sives Financial Services partner Ken Sives says: “You are always going to be found out eventually. You have to wonder how this happened as you would expect somebody in this position to have been checked out properly.”

Nick Lincoln director Wilson Dean Financial Services says: “For a lot of people, it will just sum up their feelings for the company. He should absolutely should lose his job if he hasn't already. He should be dismissed."