TSB pledges ‘high street, not Wall Street’ deals for bosses
TSB’s directors have put together a low boardroom pay plan that the bank is set to announce in the paperwork for its £1.5bn stock market flotation.
The chief executive, Paul Pester, has claimed the bank, being spun off from Lloyds, wants to differentiate itself from its bigger rivals.
Given that boardroom pay repeatedly emerges as one of the public’s biggest beefs, he has pledged that his own board’s pay will be “innovative” and fitting with his claim to be running a bank that is “high street, not Wall Street”.
Although the details are still being worked out with the new 11-person board, that is expected to mean lower pay for its directors than rivals.
Lloyds has to sell the whole of TSB by the end of 2015 under orders from the European Commission because of its £20bn taxpayer bailout. It said yesterday it wants to sell 25 per cent of its share in TSB next month in a move that could value it at more than £1bn and up to £1.5bn.
Mr Pester sought to dampen fears the high street bank could be hit by the current parlous state of the market for new share issues. “We have had two rounds of meetings with potential investors and the definite view from the US and Far East is that we have real exposure to the UK economy and that it is growing ahead of Europe,” he said. “But the decision ultimately is for Lloyds and market conditions will affect that.”
City insiders said TSB’s initial float would be relatively small at about £250m and could well draw considerable interest from private shareholders who are being offered one free share for every 20 they buy up to a maximum of £2,000 worth of shares.
Mr Pester said he hoped to see private investors taking anything from 15 to 20 per cent of the shares on offer.
If market conditions or demand for next month’s first tranche of shares is so bad that it is forced to pull the sale, it would probably not come back until at least September or possibly November.
Mr Pester sought to distance TSB from some other floats and existing listed banks. “We are about growing the business,” he said. “We are very different from some of the large-scale retail banks that pay large dividends because they are not growing.
“We have 6 per cent of the branches in the UK but only 4.2 per cent of the current account market. But since we launched our latest account the number of people switching to us has risen four or five times.”
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