Northern Rock lands new boss

Barclays' Gary Hoffman is toasting his new role at Northern Rock. Many taxpayers are ruing his £2m pay packet.

Last Updated: 31 Aug 2010

Hoffman becomes chief exec of the nationalised bank after 26 years at Barclays, where he had been vice chairman since 2006. He stands to earn £2m over the next two years in his new role – a basic salary of £700k, plus three payments of £400k each over two years as compensation for his long-term Barclays incentives.

But before we get all ‘oh, another heaving fat cat salary’, Hoffman is, of course, going to have his work cut out. Currently occupying the in-tray are the not inconsiderable tasks of halving Northern Rock's £100bn mortgage book, repaying the £25bn Bank of England loan by 2010, and releasing the Government from its £75bn of guarantees the following year. Oh, and making a third of the 6,000-strong workforce redundant.

Northern Rock was nationalised in February after the credit crisis forced the bank to seek emergency funding from the Bank of England last autumn. It’s expected to remain nationalised for at least three years. At which point Hoffman will be able to judge whether his role, which he’s currently describing as ‘compelling and exciting’, has lived up to his expectations.

Few would consider heading the beleaguered lender a dream job. Indeed, if the government was ever going to get anyone to do it they were always going to have to pay big.

But pay is a sensitive subject when it comes to Northern Rock. Clive Briault, the most senior head to roll at the Financial Services Authority (FSA) in the wake of the Northern Rock debacle, walked away with a £612,000 farewell package – plus a £30,000 ‘performance-related bonus’. Who knows what he would have got if it hadn’t collapsed?

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Should CEOs get political?

The protests that have erupted over George Floyd’s murder have prompted a corporate chorus of...

“You literally have to rewrite your job description”

One minute briefing: In hard times, your network becomes more important than ever, says Prezi...

5 bad habits to avoid when leading remotely

In a crisis, it can be hard to recognise when you've taken your eye off...

A top-level guide to scenario planning

COVID creates unprecedented uncertainty, but there are tried and tested ways of preparing for an...

Is it favouritism to protect an employee no one likes?

The Dominic Cummings affair shows the dangers of double standards, but it’s also true that...

Masterclass: Communicating in a crisis

In this video, Moneypenny CEO Joanna Swash and Hill+Knowlton Strategies UK CEO Simon Whitehead discuss...