NORTHERN Rock is paying staff £14.9m in bonuses after losses narrowed last year.
The bank reported a pre-tax deficit of £257.5m for 2009 against a £1.36bn loss in 2008.
Northern Rock, which completed its restructure into “good” and “bad” banks at the turn of the year, said the payout came after staff met agreed objectives over the year.
Chief executive Gary Hoffman waived his entitlement to a bonus – saying the bank was designing a reward scheme for him that would take into account the performances of both of the newly created banks.
Bonus payments for Northern Rock staff include a £1.5m pay-out under the Chancellor’s one-off windfall tax – as 32 employees received rewards of £25,000 or more.
Mr Hoffman said the bank’s results were “encouraging” – with underlying pre-tax losses of £383.3m against Government targets by £500m.
“There is no reward for failure,” he said. “I understand that we are still loss-making, but we have beaten the target and we have substantially improved financially.”
While it was right that most of the improvement went to the taxpayer, some should be given to staff, Mr Hoffman said.
Most of the Northern Rock workers to benefit were on average salaries of £20,000 to £25,000 in Newcastle and Sunderland.
Mr Hoffman said there had been improvements in employment figures and loan impairments towards the end of last year.
Charges for soured loans were £1.04bn for the full year, but reduced during the second half.
