£500,000 payoff for Northern Rock boss
The chief executive of nationalised bank Northern Rock will continue to receive more than £80,000 a month after stepping down from the role, it has been revealed.
Gary Hoffman, who has run the bank since 2008, announced his departure yesterday with immediate effect and will be on gardening leave until next April when he will join NBNK Investments, a new banking start-up led by Lloyd's of London chairman Lord Levene.
Mr Hoffman will not receive a severance package but will continue being paid his £58,000-a-month salary in addition to a £23,000-a-month pension contribution.
The total remuneration over the next six months comes close to £500,000.
The company has also confirmed he will continue to receive a £1,000-a-month car and petrol allowance.
Unions expressed outrage over the arrangements.
Brian Cole, Unite officer, said he was "disgusted" by the "golden goodbye".
"The award of £500,000 for Mr Hoffman to put his feet up represents a punch in the stomach for the 2,500 Northern Rock employees who have been sacked by Northern Rock during the last two years," he said.
Mr Hoffman will be replaced by Ron Sandler, who led the failed lender in the months after its multi-billion-pound state bailout, in the interim.
He will take up the position of executive chairman.
Mr Hoffman has been credited with beginning a turnaround at Northern Rock, leading to the removal of the Government deposit guarantee implemented in the immediate aftermath of a run on the bank.
He has also led the separation of Northern Rock into a so-called 'good bank', consisting of the company's continuing operations, and a 'bad bank', made up of Northern Rock Asset Management - the home of toxic assets that will be run down over several years.