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TSB boss defends potential £1.6m pay package | |
(about 1 hour later) | |
The boss of the new High Street Bank TSB has defended his own salary, after announcing a new "fair and simple" approach to bonuses. | The boss of the new High Street Bank TSB has defended his own salary, after announcing a new "fair and simple" approach to bonuses. |
TSB - of which 25% is being floated on the stock market this month - said bonuses for all 8,600 staff will be up to 10% of their salaries. | TSB - of which 25% is being floated on the stock market this month - said bonuses for all 8,600 staff will be up to 10% of their salaries. |
Outstanding performers may be awarded up to 15%, said the Bank. | Outstanding performers may be awarded up to 15%, said the Bank. |
But under the new rules, TSB's chief executive, Paul Pester, will still be able to earn more than £1.6m. | But under the new rules, TSB's chief executive, Paul Pester, will still be able to earn more than £1.6m. |
That is because of an additional reward scheme for executives, that allows them to double their basic pay. | That is because of an additional reward scheme for executives, that allows them to double their basic pay. |
As a result, however, the bank will conform to the new EU cap on bonuses, which came into force earlier this year. | As a result, however, the bank will conform to the new EU cap on bonuses, which came into force earlier this year. |
The EU rules allow bonuses to be as large again as basic pay. If shareholders agree, bonus payments can amount to double regular pay. | The EU rules allow bonuses to be as large again as basic pay. If shareholders agree, bonus payments can amount to double regular pay. |
Other banks, including HSBC, Barclays and Lloyds, have side-stepped the cap, by paying bonuses in shares instead of cash. | Other banks, including HSBC, Barclays and Lloyds, have side-stepped the cap, by paying bonuses in shares instead of cash. |
John Lewis | John Lewis |
Paul Pester's base salary, including pension benefits, will be £877,500. | Paul Pester's base salary, including pension benefits, will be £877,500. |
If his performance is deemed outstanding, he will be able to earn a similar amount in bonuses, making a total possible salary of £1.682m. | If his performance is deemed outstanding, he will be able to earn a similar amount in bonuses, making a total possible salary of £1.682m. |
"It's a lot of money, I have to say," he told the BBC. | "It's a lot of money, I have to say," he told the BBC. |
"But I think what our board has thought about is...the responsibility that comes with looking after banking for 4.5m customers, looking after £20bn worth of customers' money, and actually bringing a bank to the UK that is different," he said. | "But I think what our board has thought about is...the responsibility that comes with looking after banking for 4.5m customers, looking after £20bn worth of customers' money, and actually bringing a bank to the UK that is different," he said. |
It is thought that will amount to a reduction of around £500,000 in what he might otherwise have received. | It is thought that will amount to a reduction of around £500,000 in what he might otherwise have received. |
In developing its new strategy on pay, TSB said it had looked at other banks, and taken inspiration from John Lewis. | In developing its new strategy on pay, TSB said it had looked at other banks, and taken inspiration from John Lewis. |
For that reason, all its staff will be granted £100 worth of shares in the business. | For that reason, all its staff will be granted £100 worth of shares in the business. |
Rivals | Rivals |
TSB is being split off from its parent, Lloyds, after the European Commission made that a condition of the government's original bail-out. | TSB is being split off from its parent, Lloyds, after the European Commission made that a condition of the government's original bail-out. |
With 631 High Street branches, it will be much smaller than its four big rivals. | With 631 High Street branches, it will be much smaller than its four big rivals. |
Nevertheless most of those rivals will pay their bosses considerably more than TSB. | Nevertheless most of those rivals will pay their bosses considerably more than TSB. |
Antonio Horta-Osorio, the chief executive of LLoyds, will receive £1.7m in shares this year, on top of his salary of £1m. | Antonio Horta-Osorio, the chief executive of LLoyds, will receive £1.7m in shares this year, on top of his salary of £1m. |
Antony Jenkins, the boss of Barclays, was awarded £5.3m in shares in March. | Antony Jenkins, the boss of Barclays, was awarded £5.3m in shares in March. |
And Stuart Gulliver, the head of HSBC, has been granted £1.7m in shares. | |
However, Ross McEwan, the chief executive of RBS, will take no bonus for 2013 or 2014. | However, Ross McEwan, the chief executive of RBS, will take no bonus for 2013 or 2014. |
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