UK pension fund association queries Abbey chief's bonus
The National Association of Pension Funds (NAPF) in the UK is questioning a bonus payment made to the chief executive of troubled mortgage lender Abbey National.
Luqman Arnold was brought into Abbey two years ago to oversee a shake-up of the company's activities, following the first ever full-year loss sustained by the company in 2002.
Last year, he was paid a cash bonus of £608,000 (€918.9m) and given an additional £405,000 (€612,000) in deferred shares, which, in addition to his salary, took his total remuneration for 2003 to £1.68m (€2.53m), even though the bank still posted a loss for 2003.
While the NAPF said it supports the payment of bonuses in deferred shares rather than cash, it questions whether such bonuses are appropriate prior to definite evidence of the long-term success of Abbey's transformation.
Abbey National is in the process of spinning off its non-core businesses in order to focus on its UK Personal Financial Services operations.
Abbey is expected to update investors on the progress of its transformation when it releases a first-quarter trading update at its AGM next Thursday.
