Aberdeen Reviews

Since the merger, AuM and hence revenues have been steadily declining. Senior leaders blame market conditions but this doesn’t explain why the company is falling behind its competitors. There’s no credible plan to turn this around beyond hoping for more benign market conditions, so instead there’s been seemingly constant rounds of cuts, redundancies and restructurings. Stephen Bird’s arrival as CEO seems to have coincided with an identity crisis in the company, exemplified by the “abrdn” rebrand and the three “vector” model (my bad, they’re called “businesses” now). The ii brand is now the group’s favourite child, but the board and CEO seem to be confused over what to do with the company’s legacy as a primarily institutional asset manager. The CEO’s contempt for staff is thinly veiled. The tone was set shortly after he joined with his comments criticising bonuses “spread around like peanut butter, and there is a company in-joke that Mike Bloomberg spends more time on the office floor than Stephen Bird. Not to mention his advocacy of selling off the Investments vector/business (apparently it’s at the core of our business now, though it’s hard to see what has changed). Salaries are stuck at pre-pandemic levels, that were by the company’s own admission, already below industry median. This is despite the highest sustained period of inflation in two generations. The board chooses to prioritise maintaining the dividend at a level above earnings, over a plan to reward and retain its best people. Parental leave and redundancy benefits were recently halved, being announced just after the end-of-year townhalls and employee survey. At best the timing of this announcement was ill-considered, at worst it was cynical. All these factors combine to create a toxic atmosphere, as bourne out by the latest employee survey results. The people who survive the cuts and reorgs are encouraged to push work onto others and cut corners where possible. Performance management is an afterthought. Ultimately the culture comes top-down from the CEO, and it shows.

Compensation has been cut, even for high performers, since Stephen Bird joined. The 2023 bonus pool was brutally cut in the investments vector and many people got nothing, regardless of their individual contributions, in an effort to improve the cost to income ratio in the short term. Bird says that "you eat what you kill" - an argument that may carry some weight if he himself did not take a 75% bonus, despite failing badly on his own financial targets. Bird has introduced more layers of complexity and senior management, little of whom have been in the business for long and therefore are not familiar enough with the details, putting distance between himself and the parts of the business that are structurally failing. Instead of using the strong (but shrinking) balance sheet to invest in improvements to the business, he is using the cash to pump up the share price for his own short term rewards. This is clear to all employees across the business but he is so out of touch or his incentives are simply not aligned with the long term prospects of the firm.