BOARDROOM pay at Clydesdale Bank has more than halved in the past year after it axed executives’ bonuses in the wake of its first annual loss.
Chief executive David Thorburn, who is overseeing a shake-up that will involve 1,400 job cuts by September 2015, took home a total of £510,000, down from £1.16 million in 2010-11.
Despite his drop in total pay, the bank’s annual report shows Thorburn’s basic salary and fees rose 3 per cent to £400,000, but he will receive no pay increase in the coming year. Thorburn stepped down from the board of parent company National Australia Bank (NAB) in August to focus on the restructuring of its UK operations.
A spokesman for Clydesdale, which also owns Yorkshire Bank, said: “Directors’ remuneration is very closely linked to business performance and we’ve been clear that’s not where it needs to be. As a result, no annual pay rises will be awarded to the senior management team in the year ahead.
“It is also only right that no short-term incentive bonus payments were awarded to directors for the past financial year. Reflecting the impact of these decisions and the changed board composition, directors’ total remuneration for the year more than halved.”
Executive director John Hooper, who is in charge of back-office operations, was paid £918,000 in the year to 30 September, down from £1.5m in 2010-11, although his basic salary and fees jumped 12 per cent to £703,000. Overall boardroom pay at the bank dropped from £4.7m to just over £2m.
Figures released last month showed that Clydesdale slumped to a pre-tax loss of £183m in the year to September – its first annual loss – after it was hit by a sharp increase in bed debts.
In April, NAB unveiled a dramatic restructuring of the UK businesses that would see the closure of 29 business centres and the loss of 1,400 jobs.
NAB’s annual report, also published yesterday, shows that Thorburn’s “statutory remuneration” in 2012 was just over A$1.3m (£851,000), including “non-monetary” short-term benefits of A$323,000. A spokesman pointed out that NAB’s figures include employer’s national insurance contributions and its accounting treatment of performance-related pay is different to the UK.
He added: “In Australia, performance-related pay includes amounts expensed in relation to prior year awards, whereas in the UK, we disclose the awards payable in relation to the current financial year. NAB also includes an accrual for annual leave, whereas this is not standard practice in UK reporting.”
NAB group chief executive Cameron Clyne enjoyed a modest rise in total remuneration to A$8.8m last year, up from A$8.68m in 2011. Clyne took on the role of executive chairman at Clydesdale in July following the retirement of previous chair Sir Malcolm Williamson. He said the bank’s results had been “disappointing” but were not unexpected given increased funding costs and weakened demand for credit.
He added: “The uncertainty in the UK economy and in the sector as a whole will undoubtedly continue for the foreseeable future as the regulatory and bank reform agenda in Europe settles.
“I am confident however that the changes that we continue to make will ensure that Clydesdale Bank is stronger and better placed to challenge other UK banks.”