Banking News Northern Rock Ex Chief Gets 2 7million Pension As Sir Freds RBS Pot Grows 3019

Northern Rock ex-chief gets £2.7million pension as Sir Fred’s RBS pot grows

04 March 2009 / by Rachael Stiles
The ex-chief executive of Northern Rock, Adam Applegarth, has a pension pot worth £2.7million, it has been revealed, after receiving more than £800,000 in severance pay and pension top-ups last year.

The disgraced chief executive left the bank under a dark cloud in December 2007, after being asked to resign rather than being forced to leave.

Consequently, he enjoys the associated benefits of departing under his own steam, including a year’s salary and employer’s pension contributions, which he would not have received had he been sacked.

Mr Applegarth can retire at 60 and claim an annual pension of £305,000, or he could claim it at 55 in return for reduced pension payments.

The news comes as the bank announced a £1.4billion loss for last year in its annual report yesterday, along with figures which revealed that Northern Rock mortgages are responsible for one in 10 repossessions, and almost one in three of its borrowers is in negative equity.

The increase in Mr Applegarth’s pension was a “contractual entitlement”, a spokesperson for Northern Rock told The Telegraph, and should not be likened to the enlarged pension given to Sir Fred Goodwin, the former chief of Royal Bank of Scotland.

Further to previous reports of a £16million pension pot, it has emerged that Sir Fred’s pension is actually worth £703,000 a year, £10,000 more than the £693,000 which it was thought to be paying him.

As with Mr Applegarth at Northern Rock, the RBS board asked Sir Fred to leave voluntarily, rather than sack him, and agreed to execute Sir Fred’s departure in such a way to ensure an amicable and orderly handover to his successor.

Sir Fred also left his post under a cloud, while RBS was on the brink of collapse – many say as a result of his own business model – and in the process of being rescued by the Government with taxpayer’s money, much like Northern Rock, which was nationalised more than a year ago.

If Sir Fred had been sacked instead of asked to take early retirement, at 50, he would have received a £416,000 annual pension, rather than the £703,000 he is receiving.

© Fair Investment Company Ltd

Written by Editorial Team