Industry insiders said the society is having to fund big payouts to retain staff to make up for the fact that, unlike quoted competitors such as the Woolwich or Abbey National, it has no alternative currency to offer footloose staff except cash.
The society yesterday denied reports that it is paying some directors 100 per cent bonuses this year. Jeremy del Strother, director of communications at Nationwide, said the existing bonus scheme was capped at 60 per cent of salary. Nevertheless, the award of bonuses at even that level are likely to restoke the controversy sparked last year when it was disclosed that the chief executive, Brian Davis, received almost pounds 500,000, of which nearly 40 per cent was made up of bonuses and pension contributions.
The society refused to comment on likely bonuses this year, despite expectations that profits have been boosted by the buoyancy of the housing market. These will be disclosed in six weeks, when its annual report is published.
The bonus payouts are dependent on a number of criteria including customer satisfaction and personal performance as well as profits.