KENT Reliance building society has defended 30 per cent pay hikes for its bosses.

Chief executive Mike Lazenby's package went up 35 per cent from £320,000 in 2006 to £433,000 in 2007, made up of £350,000 salary, £37,000 performance bonus and £46,000 pension contribution.

Rob Procter, deputy chief executive, and Bob Scruton, finance director, each saw their package rise from £196,000 to £271,000, including £220,000 salary, a bonus of £22,000 and pension contribution of £29,000, an overall increase of 38 per cent.

However, the society said that the packages reflected their success in making Kent Reliance the fastest-growing building society in the country, boosting assets in the past year from £1.6billion to £2.1billion, a rise of 32 per cent, and making pre-tax profits of £5.7million.

It has also cut its management expense ratio from 50p to 44p for every £100 of assets - one of the lowest in the industry - due mainly to its Indian subsidiary Easiprocess, and new computer systems in its Sun Pier, Chatham, headquarters.

It has branched out into home loans in Jersey and Guernsey and has started to earn fees from clients using its operation in Bangalore. Award-winning products have attracted thousands of new investors.

Malcolm Mackenzie, the mutual’s chairman, told 150 society members at the annual meeting in Chatham that the society paid only the median rate for the top jobs.

"We think we have to be positioned there given that we have the most outstanding business model the sector has to offer at the moment," he said.

"So in spite of the fact that it does appear high, it’s actually about average as far as the sector is concerned."

Paying the right salary ensured the society retained talent. "They could easily go elsewhere, they could be poached and I am sure, given the performance they have achieved on your behalf, you wouldn’t want to see that."

Mr Lazenby admitted he was paid a lot of money but worked long hours. "If I was paid half of what I get, for some members that would still be too much," he said.

"You've got something to be proud of and it's not just my performance, it's the performance of the whole team."

At the end of the meeting, Mr Mackenzie revealed that members had voted overwhelmingly - 88 per cent - in favour of executive remuneration levels.