ALLIANCE & Leicester's senior directors will gain huge windfalls for staying in their jobs following the lender's £1.3 billion takeover by Spanish bank Santander, it emerged yesterday.
Santander is offering retention bonuses of up to 125 per cent of salary for its top four executives if they remain in post until December next year.
Chief executive David Bennett, who has been in the top job little more than a year, could land a p
otential £750,000.
Details of the bonuses emerged in information sent to A&L's investors, who must approve the takeover deal at a meeting in Birmingham on 16 September.
The retention payouts come despite the value of investors' shares falling to just a quarter of their worth in May last year as the lender is buffeted by the credit crunch.
Investors will receive one Santander share for every three of A&L, valuing A&L's stock at 317p each as of 8 August.
Santander plans to merge the former building society with Abbey – which it bought in 2004 – creating a business with 959 UK branches and a share of more than 8 per cent of the savings and personal loans market.
The A&L board has agreed to the deal to provide certainty in troubled financial markets.
In a move to convince shareholders to back the deal, A&L yesterday warned of "significant external risks" if the takeover was rejected by shareholders.
A&L's board said in a statement that it was "acutely aware" of the risks presented by deteriorating economic conditions and the turbulence in financial markets, which could continue for a significant period of time.
It added: "Unfavourable developments at other financial institutions could generate widespread general adverse sentiment towards financial groups like A&L.
"Experience of the past few months has shown that this sort of adverse sentiment can be indiscriminate."
The full article contains 318 words and appears in The Scotsman newspaper.
