Following our last newsletter on 2 April many supporters wrote to the bank to complain about the salary and bonus arrangement with the CEO, Niall Booker.
The bank appears to have sent the same reply to everyone:
The board remuneration committee went through a process to determine what the base pay and allowances should be, bearing in mind our ethics and values policy allows a market based pay structure, the need for continued work on the turnaround and the progress to date. Through this process, we have tried to address the concerns of customers by tying the rewards in terms of bonus and long term incentive closely to the success of the business plan and yet balance the needs of the bank and all the stakeholders. The Remuneration policy has also been reviewed by the Values & Ethics Committee to ensure it is in line with the Ethical Policy.
Our Chief Executive is mindful of the concerns of customers and colleagues and the executive team is making good progress in the turning the Bank around.The executive team is part of the solution and their actions to strengthen the capital position of the Bank have ensured a better outcome for The Co-operative Bank and its customers and colleagues. The Chief Executive will only stay in place whilst he is adding value as he has always said.
This suggests that Niall Booker will leave when the turnaround is complete: the implication is that his replacement would earn less. But while the response explains some of the process behind the decision it fails to address concerns raised by many supporters about the decision itself, in particular how it is ethical to pay such a large amount of money, especially while branches are being closed and staff are losing their jobs.
We intend to follow up some of these issues with the bank.