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Clydesdale Bank boss gets a bonus
We recently brought you news that the owner of Clydesdale Bank, and Yorkshire Bank, was looking to sell the two and leave the UK market.
This has been on the back of numerous scandals that the owner of the banks, the National Australia Bank (NAB), believes has become too much.
It’s clear from recent announcements that the bad names of Clydesdale and Yorkshire are having an unwanted affect on NAB.
If you add to this the fines and compensation that has had to be paid, which has seriously affected NAB’s accounts, it’s little wonder why they want to wash their hands of the dirty pair.
Scandal after scandal
News that not all was well inside Clydesdale Bank and Yorkshire Bank came last year.
The Financial Conduct Authority (FCA) and the Information Commissioners Office (ICO) discovered that the banks were attempting to destroy customer records in order to try and avoid having to investigate PPI complaints.
Just prior to that incident, in September, Clydesdale Bank were fined £8.9 million for failing to treat it’s mortgage customers fairly.
This year, the beleaguered pair have faced a huge uplift in the amount of PPI compensation it has had to set aside, having been found guilty of handling complaints unfairly.
In the space of just three months, Clydesdale and Yorkshire increased their PPI compensation pot by £75 million, followed by a huge addition of £425 million.
This took the overall PPI compensation bill for the two, to £1.2 BILLION. Perhaps the most concerning part of the announcement regarding the increase in money set aside, was that they only expected the amounts to see them through the current financial year.
Surely, after so much controversy and scandal, the top bosses would find themselves lucky to be in a job, never mind expecting to receive any form of bonus.
Chief Executive receives bonus
David Thorburn, the Chief Executive of Clydesdale Bank, clearly has some questions to answer given the above.
However, it would appear that Mr Thorburn’s salary of £455,000 wasn’t reward enough for the scandals and treatment of it’s customers, so the bank has decided to give him a sweetener.
Clydesdale Bank offered Mr Thorburn the following additional extras due to the sterling job he’d carried out!
- Short term bonus of £135,000 in shares
- A £45,000 cash bonus
- Deferred awards from previous years of £266,000
- A benefit award of £99,000
So, when we add these bonuses to the salary, Mr Thorburn has walked away with £955,000.
Not bad really when you consider he’s basically failed in his duties.
Bonus culture
In any other industry bonuses are paid based on performance, and the success of the business.
How banking has been able to get away with these nonsensical bonus structures and systems for so long is draining trust levels.
They’ll have us all believe that in order to attract the best people to run the banks, we have to offer such incentive laden contracts.
Well I’m sorry but the people who have been running our financial industry for the past few decades have FAILED, driven by the greed of shareholders and themselves.
If changing the bonus culture, wherein failure is rewarded, means that the positions are no longer attractive to these people, then that can only be a positive outcome.
I’m all for rewarding performance, as I think most of us are, but what is happening in the banking sector is far from a culture of rewarding performance.
Surely performance indicators would be customer service satisfaction levels, numbers of new customers and businesses, exemplary regulatory standards, as well as long term and sustainable profits.
Will the revolution happen? I wouldn’t count on it unfortunately.
Clydesdale Bank boss
