TSB boss Paul Pester to give up (one) bonus after IT meltdown
TSB chief executive Paul Pester will give up a bonus tied to the computer systems migration which has gone disastrously wrong, leaving thousands of customers without access to their accounts for days.
Speaking at the Treasury Select Committee, TSB chair Richard Meddings today said: “He will not be taking his bonus for the integration”.
In sometimes testy exchanges, Nicky Morgan, chair of the influential committee, said the hearing was “the most staggering example of a chief executive who seems unwilling to realise the scale of the problem.”
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Pester was paid a £2m “Sabadell Integration Award” in 2016 for leading the bank’s efforts to move to new systems provided by the firm’s parent company from former owner Lloyds. His 2017 bonus was deferred after the migration was delayed.
However, Meddings declined to say whether Pester would still be eligible for other awards not directly linked to the migration. TSB previously said no decision will be made on Pester’s bonus until the remuneration committee next meets.
TSB’s bosses and Sabadell chief operating officer Miquel Montes were grilled by MPs on the IT meltdown which struck 10 days ago as the bank carried out a complex move of records for more than 5.2m customers from 80 different Lloyds systems. The bank has been inundated by more than 40,000 complaints in the last fortnight, more than 13 times the normal rate.
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Some issues are still ongoing, with its leadership unable to set a date by which it expects to be back to normal service. Montes said it would “hopefully” be within days, rather than weeks.
The bank is scrambling to fix the issues, but has “not started to calculate” the amount it will face from customers looking for compensation for consequential losses, Pester said. He has given a “cast-iron guarantee they won’t be out of pocket”. Neither would the bank give an estimate of the costs of hiring in computing giant IBM at short notice to manage the catastrophe.
The bank has also appointed Magic Circle law firm Slaughter and May to carry out a review of the bank’s handling of the meltdown, including issues of corporate governance. Pester has already held face-to-face talks with top regulators, Andrew Bailey of the Financial Conduct Authority and Sam Woods, head of the Bank of England’s Prudential Regulation Authority.
“If there’s one decision in my life I could change it was the decision to go ahead with the migration on Sunday afternoon,” said Pester. “Clearly that was a terrible decision.”
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