Botin pay tops £4m despite Santander profits sliding and cost of mis-selling

Santander’s UK boss received more than £4 million in pay and bonuses for 2011 despite the bank suffering a drop in profits after it put aside more than £500 million to cover the cost of mis-selling payment protection insurance (PPI).

However, chief executive Ana Botin, who received just below £4.1m including £1.7m salary, and her fellow executive directors were all denied any share awards under the bank’s long-term incentive plan.

Bottom-line UK profits at the Spanish-owned lender fell 40 per cent to £993m after it put aside £538m to cover claims arising from the mis-selling of PPI. Rival banks were hit with even higher PPI charges. Santander’s underlying profits, excluding exceptional costs, were still down by 6 per cent to £1.5 billion.

The bank expanded significantly in the UK following the acquisition of Abbey National, Alliance & Leicester and parts of Bradford & Bingley and is in the process of buying 318 branches from Royal Bank of Scotland.

Botin, the highest paid director at the bank, was appointed chief executive on 1 December 2010 and consequently did not work for Santander during the period affected by the PPI mis-selling claims.

But the bank, which writes about one in six UK mortgages, battled with higher costs of regulation, including the UK government’s bank levy, higher lending costs and limited demand for loans in 2011.

Yesterday’s remuneration report also revealed the highest paid senior executive, outside the executive team, received £1.5m in pay and bonuses.