Santander boss notches up £6.4m pay package as branches axed and profits tumble
Banking giant Santander has revealed its UK boss picked up a mammoth £6.4 million pay package for 2018 just a month after announcing swingeing branch closures and tumbling profits.
The high street lender’s annual report shows chief executive Nathan Bostock was awarded a £2.3 million annual bonus on top of his £1.68 million annual salary, with a further £638,000 in pensions and benefits.
His £4.6 million total pay was boosted further by a whopping £1.8 million to compensate him for share bonuses he gave up when he left Royal Bank of Scotland (RBS) at the end of 2013 – the final such annual payment.
The revelation follows Santander’s shock announcement last month that it is to axe 140 branches across the UK, putting more than 1,200 jobs at risk.
His hefty pay package and bonus award also come despite Spanish-owned Santander reporting a 14% drop in underlying UK profits to £1.7 billion for 2018 and being hit by a £32.8 million fine for “serious failings” in processing deceased customer accounts.
In the bank’s annual report, Santander’s remuneration committee chairwoman Annemarie Durbin said: “Our management team has delivered solid business performance this year, delivering for our shareholders, people, customers and communities.
“The continued progress made towards our strategic and operational goals (including the establishment of the ring-fence bank) was achieved despite the competitive and uncertain environment.”
Profits were weighed down by higher regulatory costs, including those related to ring-fencing to keep personal and small business banking services separate.
But the bank’s results showed it also came under pressure amid competition in the mortgage market, with its net interest income – a key measure for lenders – falling 4% to £3.1 billion.
And while mortgage lending rose, customer deposits fell to £142.1 billion from £143.8 billion due to a £3.5 billion decline in savings balances.
The annual report showed that Mr Bostock’s pay package for 2018 compares with £6.5 million for 2017, which included £4.7 million in pay and bonuses, as well as £1.8 million for the RBS share buy-outs.
The RBS payments have attracted controversy, as they related to his time as head of risk and restructuring at the bank – a role in which he was responsible for overseeing the disgraced Global Restructuring Group (GRG) at the centre of its small business scandal.
The unit has been accused of pushing firms towards failure in the hope of picking up assets on the cheap.
Mr Bostock was promoted to become finance director at RBS in October 2013, but quit after just 10 weeks in the role to head up Santander UK.