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Less of this nonsense

Created:
23 September 2008
Updated:
25 September 2008
Written by:
Alistair Blair

Plenty has been written about the banking crisis already. I don't propose to add to it this week. Rather, I've presented you with the facts relating to executive pay at leading banks. You can judge for yourself whether this was money well spent.

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The following tables sum up remuneration at leading UK banks, plus Lehman Brothers, Fannie Mae and Freddie Mac. They relate only to cash bonuses, not to share-based incentives.

Bradford & Bingley

Year Chief executive Chief exec cash bonus Other directors cash bonus
2002 Christopher Rodrigues £264,000 £353,000
2003 Christopher Rodrigues £250,000 £362,000
2004 Steven Crawshaw £177,000 £319,000
2005 Steven Crawshaw £289,000 £287,000
2006 Steven Crawshaw £360,000 £477,000
2007 Steven Crawshaw £272,000 £487,000

Current and recent Remuneration Committee members include Mark Smith, Rod Kent, Trevor Lewis, Louise Patten, Ian Cheshire.

2007: "It is proposed that from 2008 the short-term performance components of both cash and deferred shares will be increased [from 60 per cent] to 100 per cent of salary for maximum performance and [from 30 per cent] to 50 per cent at on-target performance."

Northern Rock

Year Chief executive Chief exec cash bonus Other directors cash bonus
2002 Adam Applegarth £319,000 £472,000
2003 Adam Applegarth £394,000 £526,000
2004 Adam Applegarth £368,000 £488,000
2005 Adam Applegarth £529,000 £1,118,000
2006 Adam Applegarth £660,000 £1,568,000

Current and recent Remuneration Committee members include Sir George Russell, Sir David Chapman, Sir Ian Gibson, Nichola Pease, Matt Ridley, Sir Derek Wanless, Michael Queen.

2006: "Only where there is an increase in underlying profit attributable to shareholders will directors be eligible for a short-term bonus… a very robust target."

HBOS

Year Chief executive Chief exec cash bonus Other directors cash bonus
2002 James Crosby £363,000 £1,761,000
2003 James Crosby £310,000 £1,142,000
2004 James Crosby £534,000 £2,055,000
2005 James Crosby £586,000 £1,622,000
2006 Andy Hornby £606,000 £2,653,000
2007 Andy Hornby £703,000 £3,729,000

Current and recent Remuneration Committee members include Karen Jones, Sir Ron Garrick, Sir Brian Ivory, Richard Cousins, Coline McConville.

2007: "We will continue to set really stretching targets but we will increase target incentives by a half."

Royal Bank of Scotland

Year Chief executive Chief exec cash bonus Other directors cash bonus
2002 Fred Goodwin £1,733,000 £6,382,000
2003 Fred Goodwin £990,000 £3,016,000
2004 Sir Fred Goodwin £1,500,000 £3,019,000
2005 Sir Fred Goodwin £1,760,000 £3,200,000
2006 Sir Fred Goodwin £2,760,000 £7,626,000
2007 Sir Fred Goodwin £2,860,000 £6,330,000

Current and recent Remuneration Committee members include Bob Scott, Colin Buchan, Jim Currie, Janis Kong, Sir Tom McKillop, Peter Sutherland.

2007: "The Remuneration Committee proposed and the Board agreed annual incentive payments of up to 112.5% of normal maximum levels."

Alliance & Leicester

Year Chief executive Chief exec cash bonus Other directors cash bonus
2002 Richard Pym £337,000 £804,000
2003 Richard Pym £250,000 £529,000
2004 Richard Pym £200,000 £420,000
2005 Richard Pym £575,000 £845,000
2006 Richard Pym £787,000 £1,208,000
2007 David Bennett £270,000 £559,000

Current and recent Remuneration Committee members include Margaret Salmon, Roy Brown, Mary Francis, Sir Derek Higgs, Mike McTighe.

2007: "An executive director’s bonus for on-target performance was 75 per cent of salary with a maximum of 150 per cent of salary for exceptional performance. The actual bonus was arrived at by calculating the combined multiplier for performance against Group targets, multiplied by the relevant individual performance multiplier and applying the resulting multiple to 75 per cent of the relevant executive director’s salary."

Lehman Brothers

Year Chief executive Chief exec cash bonus Other directors cash bonus
2002 Richard Fuld $1,050,000 $4,874,000
2003 Richard Fuld $6,650,000 $19,000,000
2004 Richard Fuld $10,250,000 $29400,000
2005 Richard Fuld $13,750,000 $24,750,000
2006 Richard Fuld $6,250,000 $17,250,000
2007 Richard Fuld $4,250,000 $14,400,000 

Current and recent Remuneration Committee members include John Akers, Marsha Johnson Evans, Sir Christopher Gent, John D Macomber.

March 2008: "In evaluating the performance of Mr. Fuld, the Compensation Committee was strongly influenced by the company’s financial performance in 2007, his role in leading the Company through the challenging market environment, and orchestrating the company’s strategic direction and objectives including the continued diversification of the Company across businesses, regions and products…"

Fannie Mae

Year Chief executive Chief exec cash bonus Other directors cash bonus
2002 Franklin Raines $3,300,000 $2,867,000
2003 Franklin Raines $4,180,000 $3,899,000
2004 Daniel Mudd 0 0
2005 Daniel Mudd $2,591,000 $10,518,000
2006 Daniel Mudd $3,500,000 $7,983,000
2007 Daniel Mudd $2,227,000 $5,623,000

2007: "Due to our poor financial performance in 2007, the Board determined that our named executives’ total direct compensation… should generally reflect an overall decrease from their 2006 total direct compensation, while still rewarding our positive performance on our other important corporate goals."

Freddie Mac

Year Chief executive Chief exec cash bonus Other directors cash bonus
2003 Richard Syron 0 $647,000
2004 Richard Syron $2,500,000 $7,265,000
2005 Richard Syron $2,200,000 $6,300,000
2006 Richard Syron $2,400,000 $7,875,000
2007 Richard Syron $2,200,000 $5,590,000

January 2008: "With respect to the 2007 Bonus Funding Scorecard, at the January 31, 2008 committee meeting, management reported that we should be assessed as "below plan'' because we did not achieve all of the performance measures contained within the Shareholder Value and Efficiency objectives."

MORE FROM ALISTAIR BLAIR...

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Alistair Blair is a past winner of the Business Writer of the Year Award, and has worked in investment banking and fund management.

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