Former Northern Rock boss, Adam Applegrath received a pay off of £750,000 when he left in December, it has been revealed. He will also be entitled to a pension pot of £2.5million at age 55, the pension has been built up over his twenty years in banking.
Northern Rock will no doubt point out that the money is being paid to Applegrath on a monthly basis, and will be reduced if he finds another job.
Vince Cable, the Liberal Democrats Treasury spokesman was quickest of the political parties to react, saying:
It was ‘outrageous that someone who brought the bank to the brink of destruction and subjected taxpayers to liabilities worth billions of pounds should be rewarded for failure’.
It doesn’t look good that the government appears to be sanctioning pay-outs of this size to someone who played a big role in the bank’s demise,’ added Cable. ‘Many people said well before Northern Rock hit the skids that it was lending too aggressively and that its business model was risky.’
More shame and controversy is expected today when the Northern Rock accounts are published, showing exact details of Directors remuneration. More alarmingly, the accounts will also show millions paid out to investment bank Citigroup and Goldman Sachs, for advising on funding options and a possible sale of the business.
Currently small shareholders stand to get paid around five pence per share, for shares that were floated in 1997 at 463p and peaked early last year at £12. When the banks shares were suspended in March they were trading at 90p.
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