Spot the conflict...
"Boards need to ask themselves, 'Are we behaving reasonably? … If you're leaning over the fence talking to your next-door-neighbour, can you justify what you've done?... "There is absolutely nothing wrong with giving somebody a reward but at the present time when people are going through these difficulties that's something the boards have got to look at,"
Alistair Darling, Daily Telegraph, 16 February 2008
The FT reports today that Ron Sandler is going to be paid £90K PER MONTH - a salary agreed by Alistair Darling.
Time will tell whether he's worth it.
When I saw him on TV at lunchtime I thought for a moment I was watching a Ronnie Corbett comedy sketch, voice and body language seemed so similar.
ReplyDelete90k a month salary for a Civil Servant?
ReplyDeleteI dread to think what his service pension will be.
Just to get some perspective on the salary issue, what did Sam Alardyce get paid to be the manager of Northern Rock's sponsored football team?
ReplyDeleteI watched the conference too. Ron Sandler came across as a no nonsense safe pair of hands. He was articulate, competent and displayed encyclopaedic knowledge of the Banking system and the NR situation.
ReplyDeleteThe bank is now in very safe hands. In fact it is likely to attract lots of new business.
90K a month, pretty much the bog standard going rate for a chief exec of a large bank.
Well I suppose one can now argue civil servant pay settlements are somewhat high.
ReplyDeleteWhatever happened to the desire to serve the public, rather than enrich yourself at the expense of the public?
Anon- 2.31
ReplyDeleteNUFC are welcome to pay their employees whatever they wish. Labour are not welcome to dish out £1.1 million a year of my money on a Civil Servant whose post shouldn't even be required.
I'm just wondering how long it is before the NUFC football shirt is dawbed with "New Labour" or "ID Cards, are great" rather than the Crock logo.
£1 million a year for a captain of industry? Doesn't seem outside the usual range. Even if the lot of them are overpaid why not say that rather than criticizing one of them?
ReplyDeleteAh, the politics of envy!
ReplyDeleteIf he guides NR back to a stability and prepares it for successful return to the private sector, he'll have earned his salary and a big fat bonus - at least he won't take it off-shore.
I would focus on the monthly amount - you have to wonder whether he (or anybody) will tough it out for a full year, having to dance to Gordon's tune. How long before the guy is referred to as "ashen-faced Ron Sandler"?
ReplyDeleteMarquee Mark
Probably not worth it, but a real recovery specialist like Alan Bloom at Ernst and Young, or someone who has really run a bank (a proper bank CEO not a testosterone fuelled bond trader) would cost far more.
ReplyDeleteSandler was considered for the top job at NatWest in 1999 after a few months as COO, but was passed over because he didn't have enough banking experience (according to "City sources"). He was then paid off when NatWest was bought by RBS a few months later.
If Sandler didn't have enough experience then it is hard to see where he has acquired it since.
I predict a riot.
How much in today's money did the board of British Leyland get paid? New Labour = Old Labour + slight delay.
ReplyDeleteThat'll go a long way in Newcastle, where he will of course be based, won't he?
ReplyDeleteI'll declare an interest as he is a family member of mine, but looking at Ronnie's track record, you would be hard pushed to find a better man for the job.
ReplyDeleteHe has the credibility in the markets, proven experience of turning companies around, and has shown that he is not going to kowtow to the City against the public interest.
In terms of his salary, £90k a month is just over £1m a year which is less than he would have been earning at Computacentre (a job he had to step down from today).
I'm no fan of Brown but at least he knows who to turn to in order to clean up his mess.
In 2007 Adam Applegarth was paid £760,000 by NR - £63,000 per month.
ReplyDeleteI assume Ron will also be able to earn a bonus.
For the year to Dec 2006 the chief exec at Alliance & Leicester had a basic salary of £638,000 and a total package worth £1.4m. Basic rose to £645,100 in 2007.
I would suggest a comparison with a building society-like bank is more appropriate than the investment banking-backed high street powers of HSBC and Barclays.
The fact that the salary is quoted per month suggests that he does not get the usual 12-month rolling contract, which would warrant a slight premium
I can't get too excited about this aspect. The amount is probably the going rate for anyone half decent and, compared with the overall liability that's been foisted on us, it's a drop in the ocean.
ReplyDeleteHad I been in Ron Sandler's position the conversation would have started like this: "The job looks like a stinker. This is my fee rate. Over to you Mr Darling."
ReplyDeleteit isnt a killer blow Iain - probably pin money for him. I guess he could have done it pro-bono but then that would have itself attracted adverse comment. I am guessing that their advisers came up with a range "£1m-£3m per year" and this was the low end.
ReplyDeleteOne of the inherited "contracts" that Northern Rock has is the sponsorship of Newcastle United FC and Newcastle Falcons FC. As Northern Rock is effectively bankrupt, surely all sponsorships are off.
ReplyDeleteNow it so happens Iain Dale is a well-known supporter of West Ham United, Michel Howard M.P. supports Liverpool FC, John Reid M.P. supports Celtic FC, and Gordon Brown supports Raith Rovers FC. For myself I'm a supporter of Falkirk F.C. Why should the state sponsor rival football teams to ours?
Ian McKellar: "Why should the state sponsor rival football teams to ours?"
ReplyDeleteFor the same reason any company sponsors a football team - to get new business.
If Northern Rock needs one thing at the moment, it is new business and fresh cashflow. You don't get that by ditching two of the biggest sports clubs in the North East (an area where most current and potential Rock customers live).
They are going to run Northern Rock as a proper business, albeit with the govt as the main shareholder, and keeping existing contracts in place sends out exactly this signal which is a good thing.
fwlskgcThe worst thing that could possibly happen is if we start treating NR as a public institution. If that is the going market rate then so be it.
ReplyDelete90k a month is very reasonable for the running of a bank i feel. Do we want it to be a success or a heavy 'black' elephant?
Well Iain you could at least Google him before you post.
ReplyDeleteHe is the guy who pretty much saved Lloyds the insurance market in the 90's and they were facing much, much bigger troubles.
Also he left Natwest after he almost managed to avert the hostile takeover by RBS.
The guy is held in high regard. The Daily Telegraph said in January when he was hired (so they knew they were going to do this) that this was one of the more sensible decisions coming from the Treasury in recent times.
Chris Paul said...
ReplyDelete£1 million a year for a captain of industry? Doesn't seem outside the usual range.
Usual bollocks from CP. This man is NOT a captain of industry. He is, at the best, a lance corporal, taking his orders from the jerks in the Treasury who know less about banking than he does.
is anyone else watching Dispatches on C4 right now -its about Northern Crock.
ReplyDeletethe incompetence is breath taking.
like the Bank of England not even knowing what a CLO is.
or the FSA only having THREE - yes three - staff dedicated , out of thousands, to monitoring Northern Crock...
or the bit about the Treasury being warned an entire MONTH before the Crock crocked, that the Crock was hitting the rocks, back in August.
"incompetence" doesnt even begin to describe it.
Will Gordon's mate Sir Derek Wanless be re-appointed as risk manager? esp. after doing such a good job of saving the NHS.
ReplyDeleteAndy (6.33 p.m.)
ReplyDeleteNorthern Rock's previous sponsorship of Newcastle United does not seem to have done either of them much good.
If I were a shareholder or a borrower from Northen Rock as a plc, then I could either sell my shares or make alternative financial arrangements with a company whose practices were more in accord with my thoughts.Now as a taxpayer I am a shareholder. I cannot sell my shares in this situation.
The actual difference is now Northern Rock is a Nationalised Industry. I can't remember British Railways sponsoring Crewe Alex or Swindon Town or even Inverurie Loco (they do exist) or British Steel sponsoring Scunthorpe Utd or Motherwell.
I've often thought that sponsorship was more a way of making directors feel good (and/or getting free tickets)anyway.
This is not the way for a state industry to behave
I don't suppose a peerage comes with the job?
ReplyDeleteNow we are on the "Housing Snake", copyright this expression Matilda, the value of Mortgage Books is anybodies guess. Asking prices will fall by at least 20% over the next 12 months. I say asking 'cos you won't be able to give them away and as the builders go bust their houses and flats will be sold to Housing Associations and become slums. Keep up the good work.
ReplyDeletefreedom to prosper