NORTHERN Rock chief executive Gary Hoffman will waive his £700,000 annual bonus and in turn hand staff £15m in bonuses as the bank dramatically cut its losses for the year.
Hoffman will instead be placed on a long-term incentive scheme that will see his bonus linked to performance objectives for the bank. Management at Northern Rock (Asset Management) or the “bad bank” handed staff £14.9m in bonuses due to the strong full-year results.
The bank’s losses before tax dropped from £1.3bn to £257.9m during the year after it cut costs and saw higher net interest income.
The bank cut costs by 32 per cent for the year to £295.9m, while total income for the year climbed to £1.1bn. Profits for the latter half of the year came to £466.7m, marking an improvement on the first half.
•Meanwhile, Hoffman revealed that he had held held informal talks with possible buyers of its “good” bank. As well as a straight sale to a rival bank or private equity buyer, Northern Rock is exploring options that could see it merge with other banking assets, such as those being sold by Royal Bank of Scotland and Lloyds.