Darling may limit Rock bosses’ bonus
Dec 10 2008 by William Green, The Journal
CHANCELLOR Alistair Darling yesterday signalled he might block a scheme for Northern Rock bosses that could hand them huge bonuses.
The Unite union says staff at the nationalised bank might get bonuses of 10% of salaries, while senior managers get extra payments of up to 30%.
But the Chancellor yesterday said: “It does have to come to us and I will be having a very good look at it.”
Mr Darling also confirmed he still has a mortgage with Northern Rock, but refused to say if the Newcastle lender had passed on Bank of England interest rate cuts to him.
Speaking at a lunch for Westminster journalists, he also said the Government was continuing to look at how Northern Rock was performing as a review of its business plan continued.
Newcastle Central MP Jim Cousins said: “I feel he is going to address all those issues, but they won’t be allowed to get away with a fancy bonus scheme that is different from the staff’s.”
The Labour MP, who sits on the Commons Treasury Committee, said: “I also think he will revise the business plan to put Northern Rock on a better course for the future rather than simply paying off the debt and ruining its mortgage book. I am quite encouraged by that.”
TUC regional secretary Kevin Rowan said: “With any bonus scheme it has to be seen as fair and transparent, otherwise it acts as a disincentive.”
On the review of the Rock’s business plan, he said: “The most important thing for us in the North East is that it is able to continue as an effective and viable business.” But lending needed to be done in a fair and responsible way.
A Northern Rock spokesman said it had only announced details of the staff incentive scheme, but the deal for senior executives had not yet been finalised and required Government approval.
The company had said nothing about the possibility of a 30% bonus for bosses, he added.
The spokesman also said the business plan was under constant review and amendments would be announced as and when any changes were made.
