Santander is offering retention bonuses of up to 125 per cent of salary for four top bosses, if they remain in post until December 2009.
Chief executive David Bennett, who has been in his job little more than a year, could land a potential £750,000. He also owns nearly 61,000 A&L shares - valued at more than £190,000 by Santander's offer unveiled in July.
Details of the bonuses emerged in information sent to A&L's investors, who must approve the takeover at a meeting in Birmingham on September 16. The payouts come despite investors seeing the value of their shares fall to just a quarter of their worth in May last year as the lender was buffeted by the credit crunch.
The former building society demutualised in 1997 and has around 214,000 private investors, with 38 per cent of shares. They will receive one Santander share for every three of A&L, valuing A&L's stock at 317p.
Santander plans to merge A&L with Abbey - which it bought in 2004 - creating a business with more than eight per cent of the savings and personal loans market.
What fo you think? Have your say below.
Tweet
Showing comments 1 to 1 and replies | View All
MPs gravy train, UK (20/08/2008 at 16:58)
David Bennett has been a director of A&L for at least 6 years - possibly longer. He was promoted to Chief Executive lasy year but has been one of the top team for at least 6.
Santander is offering the bonus to get them to stay. That means they value their experience. They are some of the more respected directors in their industry. The A&L business operating profits have still been maintained but they can't do anything about the impact of the credit crunch that is affecting the cost of funding and the share price in the short term. A&L has the best mortgage book in the industry - no sub prime, no buy to let. They didn't take risks like some.
I don't see the problem. Just think Santander will end up buying a good business on the cheap at a time when nobody else can afford to buy them.