Policyholders of Standard Life, Europe's largest mutual life company, this week poured out their anger and frustration at the directors' handling of the business and called for compensation.

At an acrimonious annual meeting in Edinburgh on Tuesday, the directors were accused of arrogance and complacency, and faced calls to forego their salaries and bonuses for making a mess of the company's affairs.

"The value of the company has fallen from £16 billion [€24 billion\] three years ago to £4.6 billion today," said Mr Dickson from Carnwath in Lanarkshire, his voice shaking with anger.

Last month, Standard Life said it wanted to abandon its mutual status in 2006 and seek a stock exchange flotation in order to raise more capital. Policyholders taunted the board for having spent £11 million four years ago defending its mutual status when it was challenged by carpetbagger Mr Fred Woollard, who tried to force it to demutualise.

"The board has shared the gain, now they should share the pain," said Mr George Henderson, speaking for the National Association of Pension Funds.

The main beneficiaries of a stock market listing would be the 2.6 million with-profit policyholders, who are the only members of the company with voting rights. Most of these members will have an endowment policy, personal pension plan or with-profits bond. The windfalls are supposed to compensate members for their loss of voting rights.

How much policyholders receive will depend on how Standard Life decides to share out the company. However, a crude measure is to take the mutual's expected value on flotation of £4-£6 billion, according to analysts, and divide it by the 2.6 million policyholders. On this basis, policyholders might get £1,500-£2,000.

Payouts will be less than expected following the board's decision to abandon anti-carpetbagging measures introduced in February 2000. Those meant that anyone taking out a new with-profits policy after that date had to sign away their rights to a windfall if the company demutualised within three years of their joining.

Some policyholders have interpreted the board's decision as a tactical move by Standard Life's management to maximise the potential vote in favour of demutualisation.

None of the customers of Standard Life Bank will receive windfalls. People with term assurance will be excluded, as well as those with unit-linked policies, such as many pensions, and those with critical illness or medical insurance policies. Anyone taking out a with-profits policy yesterday or later will also be excluded.