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Nationwide Boss Earns £750,000 Bonus Despite Profit Collapse

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http://www.guardian.co.uk/business/2009/ju...ationwide-bonus

Nationwide's chief executive, Graham Beale, was paid more than £1.5m last year even though the society's profits collapsed.

His pay fell 9% from £1.7m to more than £1.5m after a three-year performance deal paid out almost its maximum. The society's profits slumped more than a third to £212m last year – eroded by Nationwide's contribution to the financial services compensation scheme.

The annual report published today shows that John Sutherland, the departing sales director, walked away with more than £1m to clear the way for Chris Rhodes from Alliance & Leicester. Sutherland's pay was bolstered by £749,000 of "contractual and other payments". He took £412,000 in a lump sum from his pension. He is now on a £103,000-a-year pension.

Stuart Bernau, the product and mark­eting director, received £836,000.

Britain's biggest building society has been forced to bail out troubled rivals including Cheshire and Derbyshire as the credit crunch bit.

Beale's basic salary was lifted from £575,000 to £650,000 after he received £252,000 in lieu of pension. Although he missed out on a short-term bonus – in the previous year it was £644,000 – his payout on the medium-term plan of £752,000 was double what he received the previous year.

The remuneration committee justified the payout because a "strong performance has been delivered compared with the society's historic competitors".

The maximum payout he could receive from this plan was 130% of salary. He received just short of this maximum.

Win, lose or draw get your bonus.

It must be nice to have one of these jobs where no matter the performance you get a big fat bonus.

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http://www.guardian.co.uk/business/2009/ju...ationwide-bonus

Win, lose or draw get your bonus.

It must be nice to have one of these jobs where no matter the performance you get a big fat bonus.

Then again I suppose you could argue he hasn't done badly all things considered when measured against his "peer" group who have now either been swallowed up by nationwide or by spanish banks or are in government ownership.

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I'm fairly ambivalent towards this matter.

Nationwide is a mutual so they have a lot more governance oversight than the de-mutualised with shareholders at arms' length. In comparison to other building societies, Nationwide have also done quite well, as in 'they were not downgraded and are not close to collapse'.

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Then again I suppose you could argue he hasn't done badly all things considered when measured against his "peer" group who have now either been swallowed up by nationwide or by spanish banks or are in government ownership.

this is the fallacious argument of "Entitlement", it is the biggest drain on our recovery and the return to a fair society.

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This is what's wrong about corporate Britain.

Real businessmen (I assure you!) make a lot of money when they do well but stake their livelihoods and work really hard for nothing when the business is emerging.

The problem arises with the divorce between ownership and control; ownership through pension schemes is the worst thing that ever happened because these faceless knobsters don't scrutinise the running of their business, and since they're all on the same gravt train they don't think this sort of pathetic deal is even wrong.

EDIT: edited to take account of Sir Sidneys correct point; this doesn't explain the Nationwide situation but I think it does explain a lot of the outrageous CEO deals for ordinary performance around these days.

Edited by bogbrush

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I'm fairly ambivalent towards this matter.

Nationwide is a mutual so they have a lot more governance oversight than the de-mutualised with shareholders at arms' length. In comparison to other building societies, Nationwide have also done quite well, as in 'they were not downgraded and are not close to collapse'.

+1

and didn't lend stupidly

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http://www.guardian.co.uk/business/2009/ju...ationwide-bonus

Win, lose or draw get your bonus.

It must be nice to have one of these jobs where no matter the performance you get a big fat bonus.

Nationwide look like a financial winner to me.

Who would you rather have in charge of your money? Graham Beale or Andy Hornby?

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I'm fairly ambivalent towards this matter.

Nationwide is a mutual so they have a lot more governance oversight than the de-mutualised with shareholders at arms' length. In comparison to other building societies, Nationwide have also done quite well, as in 'they were not downgraded and are not close to collapse'.

have you TRIED to get a vote of change through?

I thought not.

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Nationwide haven't collapsed, and by the looks of it will not do so. I'd say the Head Honchos there deserve a pat on the back.

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I'm fairly ambivalent towards this matter.

Nationwide is a mutual so they have a lot more governance oversight than the de-mutualised with shareholders at arms' length. In comparison to other building societies, Nationwide have also done quite well, as in 'they were not downgraded and are not close to collapse'.

yep, Natwide have actually performed extremely well in the circumstances, theyve also been screwed over by Govt intervention. Had the Govt not saved the banks and introduced unfair trading advantages to those failed companies. Nationwide as a well run company would have been huge winners in being able to sweep up the assets at market price and continued to apply their good management

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this is the fallacious argument of "Entitlement", it is the biggest drain on our recovery and the return to a fair society.

No its got nothing to do with entitlement ... and I don't quite know which "society" you'd want to return to but none of them have been fair or ever will be.

Equally I didn't realise you were expecting a "return to fairness".... most I think are looking for a return to solvency.

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he has a remuneration committee that decided a 3 year plan for his remuneration. What was life like three years ago ? They set certain parameters which he has mostly met and his remuneration was objectively decided - you'd all be playing hell if it were discretionary - at least this way there was straightforward transparent identification of the things he needed to do and the benchmarks he needed to hit. They were mostly met - so he got his legally agreed and contracted entitlement per the rules of the Nationwide.

Would you expect an otherwise excellent doctor to lose a large part of his pay if we ended up where Swine flu was killing tens of thousands of people (and he was measured by deaths per patient seen) ? Of course not.

Would you, yourself, sign up, if you had the choice, to an entirely discretionary bonus, or would you insist on an objective set you knew all about well in advance so you would not get shafted unfairly if you suddenly stopped being flavour of the month ?

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http://www.guardian.co.uk/business/2009/ju...ationwide-bonus

Win, lose or draw get your bonus.

It must be nice to have one of these jobs where no matter the performance you get a big fat bonus.

Look at the bit you bolded yourself:

His pay fell 9% from £1.7m to more than £1.5m after a three-year performance deal paid out almost its maximum. The society's profits slumped more than a third to £212m last year – eroded by Nationwide's contribution to the financial services compensation scheme.

Putting aside the question of whether mega-bonus levels are a good thing in themselves*, a bonus is designed to reflect the performance of the individual, not whether that performance was compromised by the gambling losses of others in his industry.

* which I definitely think is up for debate.

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They need to offer these management gurus large bonuses and paypackets for failure otherwise they will work elsewhere.

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Guest BoomBoomCrash
he has a remuneration committee that decided a 3 year plan for his remuneration. What was life like three years ago ? They set certain parameters which he has mostly met and his remuneration was objectively decided - you'd all be playing hell if it were discretionary - at least this way there was straightforward transparent identification of the things he needed to do and the benchmarks he needed to hit. They were mostly met - so he got his legally agreed and contracted entitlement per the rules of the Nationwide.

Would you expect an otherwise excellent doctor to lose a large part of his pay if we ended up where Swine flu was killing tens of thousands of people (and he was measured by deaths per patient seen) ? Of course not.

Would you, yourself, sign up, if you had the choice, to an entirely discretionary bonus, or would you insist on an objective set you knew all about well in advance so you would not get shafted unfairly if you suddenly stopped being flavour of the month ?

How thoroughly unsurprising to see you argue in support of the sickening bonus culture of the banking industry.

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This is obscene.

Ive written to them and complained.

Im receiving little or no interest and they dish out this kind of money for failure.

Bye Bye Nationwide, ill have my money back thanks.

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This is obscene.

Ive written to them and complained.

Im receiving little or no interest and they dish out this kind of money for failure.

Bye Bye Nationwide, ill have my money back thanks.

How the feck is this failure!

Failure would have been doing what 75% of other Financial institutions did, taking huge corporate risks, selling the company down the river of future telephone number losses whilst pocketing vastly inflated bonuses on current performances for the years commission would have rolled in between 03 & 07

I suspect most British taxpayers would far rather he receive this bonus rather than leaving the taxpayer with a further 50 billion headache in the future

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I'm fairly ambivalent towards this matter.

Nationwide is a mutual so they have a lot more governance oversight than the de-mutualised with shareholders at arms' length. In comparison to other building societies, Nationwide have also done quite well, as in 'they were not downgraded and are not close to collapse'.

Building societies may be "owned" by the members but in the end the management can and does ignore them when they want - witness the way they get motions they don't like removed from annual meetings, the way the management of the C&G refused to answer questions from people who didn't agree with the society being sold to Lloyds (yes I know it was a long time ago)

Despite their tag line of owned by and run for the members, building societies are as much personal fiefdoms of the management as many companies

Andy

Edited by Andy D

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Voting stuff came through today

"Keep us how you like us"

Well I'd like you to pay me interest on my current account like you used to, and increase the rate on my savings to something which makes me want to vomit less.

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Voting stuff came through today

"Keep us how you like us"

Well I'd like you to pay me interest on my current account like you used to, and increase the rate on my savings to something which makes me want to vomit less.

It's a building society ... where are the sector investment opportunities that would enable them to pay higher interest to depositors?

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Guest BoomBoomCrash
It's a building society ... where are the sector investment opportunities that would enable them to pay higher interest to depositors?

It's a building society ... where is the justification for this salary given the lack of sector investment opportunities?

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It's worth remembering they lost a large portion of cash because OTHER banks went bust and they had to cough up to cover the losses.

They are the traditional persecuted saver. They were wise and prudent and were subsequently punished for this.

That said, I've had my AGM voting form through and have voted DOWN the directors and director pay as £1.5m is just TOO MUCH for a desk job.

No-one deserves to make that much money without personal financial risk.

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It's a building society ... where is the justification for this salary given the lack of sector investment opportunities?

As I said above, the rewards system is up for debate as far as I'm concerned. I'm in favour of a more equal society, which means curbing these packages one way or another.

But that's not the premise of the thread. The debate is about whether the CEO should be judged on poor results that are due to the external compulsion to underwrite the reckless gambling of other institutions.

If you agreed to pay me to clean and tidy your place, and I did the work to a reasonable standard, and then vandals broke in and messed the place up again ... should I be expected to forfeit my wage?

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