Anger over Rock boss's £500,000 'to do nothing'

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The Independent Online

Unions described the decision by state-owned Northern Rock to hand chief executive Gary Hoffman £500,000 in pay, pension and other benefits for doing nothing for six months as a "punch in the stomach" yesterday.

Mr Hoffman is planning to take over as chief executive of the new banking group NBNK, set up by Lord Levene and a group of City and political grandees to become a "new force in banking".

But the huge amount of tax payers' cash Mr Hoffman will pocket for sitting at home will inevitably lead to accusation of "business as usual in banking".

That was the view of the Unite union, which said yesterday: "Unite is disgusted that Northern Rock has awarded Gary Hoffman a golden goodbye of £500,000. The award of half-a-million pounds for Mr Hoffman to put his feet up represents a punch in the stomach for the 2,500 Northern Rock employees who have been sacked during the last two years."

Mr Hoffman's place will be taken by Ron Sandler, who will resume the role of executive chairman of Northern Rock, despite this violating best corporate governance practice, which holds that a chairman should be a non-executive.

Despite NBNK ruling itself out of bidding for Northern Rock in taking Mr Hoffman on, Mr Sandler said his gardening leave was necessary to protect Rock's interest.

Mr Hoffman is set to earn a similar salary at NBNK but the company would not comment on what sort of incentives would be loaded on to the package. NBNK wants to buy the 600-plus branches that Lloyds is required to sell by the EU.

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