BONUSES
Bonuses payouts at Northern Rock
Most of the 4,500-strong workforce at nationalised bank Northern Rock will receive bonuses worth 10% of their salary under an agreement approved by the Treasury last year.
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According to a report in the Financial Times (22 January 2009):
“Senior executives at Northern Rock are also in line for bonuses of at least 10 per cent. But the bank stressed that these payments, which are subject to approval by a remuneration committee, have yet to be signed off.”
Northern Rock was bailed out by the government after a run on the bank in 2007.
To read the full Financial Times report go to www.ft.com/cms/s/0/4addb6ac-e825-11dd-b2a5-0000779fd2ac.html
Unite union defends bonuses
Unite national officer Rob MacGregor said: "Unite members and staff at the bank have worked exceptionally hard in extremely difficult circumstances. They have experienced the loss of friends and colleagues through compulsory redundancy yet have continued working solidly with dedication and commitment."
He added: "These have been very difficult times and this bonus agreed with the Treasury was promised if targets were met. Their dedication and commitment has meant that they have not only achieved but exceeded the targets set. The bonus will be welcomed by the staff that have had to endure a very difficult working environment, including a freeze on their normal bonuses and promotions for some 18 months. This is fair recognition of their hard work and dedication."
Unite is the largest union in the United Kingdom, with over two million members in the public and private sectors. To find out more visit www.amicustheunion.org.
Political reaction (source: Press Association)
Asked whether Gordon Brown approved of the Northern Rock bonuses, the Prime Minister's spokesman told reporters:
"Northern Rock, as I think is well known, has repaid its debts to the government at a rate faster than originally planned for. Operational decisions such as this are a matter for Northern Rock."
Liberal Democrat Treasury spokesman Vince Cable said:
"This is bringing the worst of the City bonus culture into a public body. This is an extraordinary action from a state-owned bank which still owes billions to taxpayers. When millions of people are facing pay cuts or even unemployment, this is indefensible. The government should step in to stop this now."
Key Northern Rock staff “receive secret bonuses”
Meanwhile, The Times newspaper has reported (13 January 2009) that senior staff at Northern Rock are receiving secret bonuses of up to £100,000 a year as part of an incentive scheme.
The bank’s board approved the bonuses for 173 staff who are seen as essential for the running of the bank. The payouts, of up to £25,000 per quarter, could double the salaries of some of the recipients.
To read the full Times report go to http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3177668.ece