Open letter to the bank
The Co-operative Bank
P.O. Box 101
1 Balloon Street,
15 May 2015
To the Co-operative Bank
An open letter to the Co-operative Bank on executive pay
Hundreds of your customers have contacted you on the subject of the Chief Executive Niall Booker’s pay packet. News sources report that Booker’s pay could amount to £4.97m this year if targets are "exceeded".
To place this in the context of the pay packages of other bank chief executives in the UK:
- Barclays CEO Antony Jenkins received £2.3 million in 2014 (about the same as the average Premier League footballer);
- The Royal Bank of Scotland CEO Ross McEwan is expected to be paid £2.7 million in 2015, after agreeing to hand back his £1 million bonus;
- HSBC’s CEO, Stuart Gulliver, received total pay and benefits worth £7.6m for 2014;
- And Lloyds Banking Group Plc’s Antonio Horta-Osorio received £11.5 million in 2014.
With assets of £45 billion, the Co-operative Bank is around 18 times smaller than the smallest of the “big four”. Yet in terms of CEO pay it ranks squarely in the middle.
We at the Save Our Bank campaign appreciate that senior management and staff face a monumental task in turning the bank around, and we recognise that progress is being made. We also very much welcome the bank’s renewed commitment to the strong ethical policy, which is one of the main reasons why many of us and our supporters continue to bank with, and support, the Co-operative Bank.
However the Co-operative Bank claims in its ethical policy that it is “not your usual bank”, as well as asserting its support for the co-operative values of equality and equity. With a widening income gap between rich and poor, more than one million people (including many of your own customers) now forced to use food banks, and a sense of anger and injustice at the disproportionate wealth of “the one percent”, your customers simply expect you to take a stand against such extravagant pay packages.
In this context, the bank’s response to those customers who have written on this issue is disappointing. While it explains some of the process behind the decision, it fails to address the concerns raised by your customers about the decision itself, and in particular how the bank considers that paying such a large amount of money is in line with your ethical values.
The response also notes that “our ethics and values policy allows a market based pay structure”. However the words “market based” did not appear in the bank’s ethical policy consultation but were added to the policy later, meaning there is no customer mandate for this approach.
As such, we ask the bank to set out full details of the CEO’s pay structure, and to explain how it considers this to be fair, responsible and ethical.
We also strongly urge Niall Booker to recognise that he is the CEO of a bank with its roots in the co-operative sector, and which is expected to meet higher standards on pay than the “big four”, and to hand back his bonus. This gesture would go a long way towards illustrating that the bank is dedicated to restoring trust and to presenting a genuine ethical alternative. If RBS can do it, so can you.
The Save Our Bank Campaign team