A&L bosses set for loyalty reward
Updated on 19 August 2008
Alliance & Leicester's top directors will gain huge windfalls for simply staying in their jobs following the lender's £1.3 billion takeover by Spanish bank Santander.
Santander is offering retention bonuses of up to 125% of salary for its top four bosses if they remain in post until December next year.
Chief executive David Bennett, who has been in the top 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, which was unveiled in July.
Details of the bonuses emerged in information sent to A&L's investors, who must approve the takeover deal at a meeting in Birmingham on September 16.
The retention 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 is buffeted by the credit crunch.
The former building society demutualised in 1997 and currently has around 214,000 private investors, representing some 38% of shares. They will receive one Santander share for every three of A&L, valuing A&L's stock at 317p each as of August 8.
Santander plans to merge the former building society with Abbey - which it bought in 2004 - creating a business with 959 UK branches and a share of more than 8% of the savings and personal loans market.
The A&L board has agreed to the deal to provide certainty in troubled financial markets.
The lender can trace its origins back to 1852 and the formation of the Leicester Permanent Benefit Society. A&L was created in 1985 in what was then the biggest-ever merger between building societies.
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