Co-op boss in line for £4.6m as bank losses hit £1.3bn

[dutchman]

Chief executive Niall Booker was paid £1.7m in 2013 and will be be paid another £2.9m this year, provided he can turn the troubled bank around



The banker brought in to salvage the Co-operative Bank received £1.7m in 2013, the troubled bank revealed on Friday as it reported hefty losses and kicked started a £400m fundraising to bolster its financial position.

The bank's annual report and accounts, issued on Friday, after two delays, showed a £1.3bn loss and contained a "going concern" warning from its auditors, KPMG, to demonstrate the importance of raising the extra cash.

The accounts are not qualified – which would set alarm bells ringing – but emphasise the importance of the turnaround strategy being put in place by new chief executive Niall Booker.

Booker could be paid another £2.9m this year, provided the bank does not breach capital rules. The sum includes a £1.2m salary plus £1.7m – the equivalent of £140,000 a month – which will be paid in quarterly instalments if the bank's financial position improves. As a result he could earn as much as £4.6m in just 18 months. In addition he was awarded £1.2m through a long-term incentive plan which could pay out in 2015.

A veteran banker credited with pulling off last year's rescue without taxpayer funds, Booker is entitled to £140,000 a month on top of his salary until June 2015.

Payments of £5m to up to 43 former and current of its senior staff are being withheld and the former bank chairman Paul Flowers – facing allegations of buying illegal drugs – still being pursued for £31,000 he was handed when he left last May.

Booker recognised his pay package appeared to be very large and insisted it was tied to his turnaround strategy for the bank rather than a guaranteed payment. He is pulling out of lending to big businesses, housing associations and overseas ventures to focus on high street banking and small business banking although will close another 44 branches this year.

Richard Pym, the former Alliance & Leicester boss brought in as chairman last year, defended the pay deal. "Tying a significant proportion of the packages to the bank's survival is particularly important given the capital position of the bank on the arrival of the new executive team," said Pym, who is receiving a £180,000 annual fee and requested that corporate donations of £20,000 are made to the University of Warwick and £100,000 a year to High Barnet Bapist Church.

[rebbonk]

Yet more payment for failure! Small share holders like me are over-ridden by the large institutions! I'd sack him!