Northern Rock staff get pay rise

Nov 30 2007 by Chris Robinson, The Journal

WORKERS at troubled Northern Rock were last night awarded a 4% pay increase and bonus for their efforts during the three-month crisis.

Bosses met with Unite union officials who last night said that without the help of staff at the bank, the North-East’s largest financial institution, “there would simply be no company left to rescue”.

The 4% increase, which will be accompanied by a 2% profit bonus and £200 Christmas bonus, is understood not to have been offered to senior management with the Gosforth-based bank.

It comes as private equity firm Olivant, led by former Abbey boss Luqman Arnold, prepares to challenge Sir Richard Branson’s Virgin Money bid by outlining its proposals “within days”.

Last night, chief executive Jayne-Anne Gadhia told The Journal that talks are still on-going with the board, however no meetings have yet been planned with the charitable arm of the bank, The Northern Rock Foundation.

Ms Gadhia would not comment on funding ear-marked for the Foundation, which helps thousands of good causes both regionally and across the country each year.

She could not yet clarify whether 5% of the profits would continue to be donated to the charity.

A spokeswoman for Northern Rock said: “An agreement was reached with Northern Rock and Unite which was fair and recognises the efforts of staff as well as the company’s current position.

“Both parties accepted that the current situation is very difficult but should not deter from the annual reviews for staff who have continued to show both loyalty and commitment to the business.”

Graham Goddard, Unite Deputy General Secretary added: “Staff have proven themselves as the backbone of the company, without them there would simply be no company left to rescue.

“I would like to take this opportunity to thank Unite workplace reps for their ongoing work to support union members.”

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Shareholders favour Olivant

ALTHOUGH Olivant has yet to reveal its plans for the imminent take over of Northern Rock, the bid from Virgin’s rival looks set to please shareholders.

They plan to allow shareholders to maintain 80% of the company, compared to 45% Virign Money has offered.

Robin Ashby, of the Small Shareholders’ Association said: “Clearly we will have to see some details about what is it they have to offer. What we have heard so far is good. It looks as though they have the support of the two biggest share holders which is a huge bonus.

“It would be done on a basis of buying into an existing business rather than transforming it. On the face of it, it would appear to be a rather more attractive position.

“Luqman Arnold has a lot of experience in running large organisations in crisis, the lady at Virgin runs 300 people in Norwich.”