A ROW over the chief executive’s 34 per cent pay rise erupted at the annual meeting of Kent Reliance Building Society.

Several members denounced Mike Lazenby’s £302,000 package, up £77,000 from a year ago.

They also condemned a 70 per cent overall increase in the directors’ pay bill, up from £509million in 2004 to £865million in 2005.

A large number of members turned up at the mutual society’s annual meeting at Buckmore Park, Chatham and many complained about the pay rises.

Mr Lazenby’s package in 2004 was £225,000. His 2005 package included £249,000 in salary and fees, a £28,000 bonus, and a £25,000 pension contribution.

The total package paid to six non-executive directors, including chairman Malcolm Mackenzie, went up 26 per cent from £509,000 to £865,000.

One member said: "I would very much like to know how to become an executive director because the rises are certainly a great deal more than a lot of us here on state pensions are getting.

"They are rather excessive this year and I think you should look next year to a more discreet increase."

Another said: "We see a doubling up in executive emoluments for 2005. I accept all that you say, that the executive is doing a very good job. I’ve no doubt you are doing everything you suggest you are.

"But nevertheless, anybody here, particularly people who are over the age of 65 who have had a two or three per cent rise in their pension see a doubling up and say: "What’s the difference between this year and last?"

Mr Mackenzie, whose own remuneration package went up 66 per cent to £40,000, defended the rises. He told members that the society, the fastest-growing in the UK, was setting the benchmark for the industry.

"We have an outstanding chief executive and a highly talented executive team. I think we get very good value for money and they are not over-paid," he argued.

Mr Lazenby added: "If I was paid half of what I get paid, it would still probably be too much for you."

Speaking after the meeting, Mr Mackenzie said that directors’ pay had gone up from a low base. The Chatham-based society was close to London and had to pay good rates to attract and keep the best people.

Mr Lazenby, he said, was one of the top society chief executives in the country and "we lose him at our peril".

"There are very few in the same league as he is. We must be a top quartile payer. This is a cracking society and I hope that after three really positive AGMs, the members are beginning to believe us.

"If this society is to be sustained as independent and mutual, we’ve got to have good, committed and talented people joining the board."

Other members praised the society for its achievements. One said: "The Nationwide had better look out."

Kent Reliance has won several awards including Mortgage Magazine Best Regional Lender and Your Money Best Children’s Savings Account Provider.

Assets have risen 211 per cent in the past five years to £1.3billion, with profits up and the management expense ratio fell from £1.42 to 59p.

The society has cut costs by outsourcing process work to its own company in Bangalore, India, and shifting branches to agencies. A simulated live television broadcast from the society’s Easiprocess subsidiary in Bangalore ended the meeting.