Sir Howard Davies' defense of Dame Alison Rose is likely to draw ire in Westminster. Credit: Jason Alden/Bloomberg
The beleaguered chairman of NatWest declares the scandal-hit former bank chief a 'great leader' ruined by politics, paving the way for her to pay £2.4m.
Sir Howard Davies blamed political pressure for the fall after she was forced to leave due to the BBC's Nigel Farage leak.
Praising Dame Alison, Sir Howard effectively gave the green light to the payout notice instead she received at least £2.43 million in annual salary.
In his first public appearance since the 'debanking' crisis, Sir Howard said he wanted to keep Dame Alison but was forced to turn around late on Tuesday after Downing Street said Rishi Sunak had 'serious concerns' about that she will stay. The government is the largest shareholder in NatWest with a 39 percent share.
Sir Howard on Friday [yesterday] blamed «political backlash» on the board's decision to replace Dame Alison as the new chief executive. He also shrugged off calls for his own resignation while speaking to reporters to announce a half-year pre-tax profit of £3.6bn, up £1bn from the same period last year.
< p>Sir Howard said: “She will be running the bank in very difficult headwinds and so we have made a different decision.
“I clearly regret the way things turned out. As a result, we have lost a great leader, but now I must look ahead.”
Explaining how it came to be that the board gave her full confidence just hours before she retired, Sir Howard said: “We think it was a rational decision at the time.
the reaction was such that Alison and I came to the conclusion, and the board upheld the view that her position was then untenable.»
Full Statement by Dame Alison Rose
He insisted that the details of the bank's payout to Dame Alison have not yet been resolved and will not be made public until NatWest's next annual report is released, which will likely be released in February 2024, potentially dropping the hot issue in long grass. p>
Sir Howard said: “Typically, remuneration decisions are published and discussed with shareholders in the [Directors’ remuneration report].
normal practice. I can tell you that the position is currently frozen.”
On Friday, NatWest commissioned law firm Travers Smith to investigate why Coutts, a private bank owned by NatWest, closed Mr. Farage's bank accounts.
He will also address the circumstances surrounding Dame Alison's communication with the BBC about a story that erroneously stated that he had been excluded from the bank due to lack of funds. The Telegraph reported that Dame Alison was sitting next to Simon Jack, BBC business editor, at a charity dinner the day before he published the false story.
Sir Howard, refusing to disclose any possible payout to Dame Alison, said: «We are unable to provide you with any information about Alison's path at the moment because, as you have seen, we have commissioned an independent review of the circumstances of the closing of the account, as well as the circumstances related to information that has fallen into the public domain of the bank.”
Following on from his comments, Mr Farage, the former leader of Ukip, lashed out at Sir Howard, who previously headed the Financial Services Authority (FSA), the predecessor of the current FCA supervisor, and called him
Alison Rose Natwest. Article promo
Mr Farage tweeted: “Sir Howard remains Chairman of NatWest…Former FSA chief who tried to keep CEO in place, FCA Rules. It's a bad move.»
He added, «NatWest's earnings are no big surprise… The whole sector is making huge profits by mistreating the public.»
Peter Flavel, chief executive of Coutts, was forced to resign on Thursday, the latest victim of the scandal.
Sir Jacob Rees-Mogg, a former business secretary, said: «I fear Sir Howard's defense of Dame Alison is showing that he just doesn't understand the gravity of NatWest's shortcomings. .
«She had to leave not because of politics, but because she violated the banker's code by exposing confidential client information and setting up a 'variety' regime that ended up purge of profitable clients due to their legitimate views.
“This is clearly contrary to the interests of shareholders and the fiduciary duties of directors. Now he should add another resignation letter to his rather long list.»
Conservative MP Alexander Stafford, a member of the House of Commons Committee on Homeland Security and Investment, said: «Shameful comments coming from the Chairman of the Board , who led the biggest drop in confidence in the banking system since Northern Rock.
“Why on earth should she be rewarded for violating the banking code, undermining confidence in the banking system, or discriminating against anyone for their legitimate views?”
Lawyers said Dame Alison was likely to receive a fine. full payment as a result of bank confirmation statements.
Anthony O'Laughlin, Director of Litigation & Setfords General Counsel said: «Her financial rights now that she has retired will depend on the terms of her agreements with NatWest, but it is likely that she will be eligible for the payment in lieu of the 12-month notice period.
“Given that this was a “mutual agreement” resignation, this does not count as a dismissal. Therefore, it is unlikely that NatWest would refuse to pay Dame Alison unless she agreed not to accept payment in lieu of notice.”
Natwest share price
Andrew Taggart, Head of UK Employment at Herbert Smith Freehills, said: “It is likely that any pay variable – i.e. bonuses and your short or long term incentives – will have to be decided by the remuneration committee. They will have some leeway and may well want to wait until this independent investigation is done.”
Earlier this week, NatWest declined to comment on whether Dame Alison was deemed a “good drop” .
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The NatWest boss took home a £5.25m salary package last year, including a £2.43m fixed salary and £2.82m bonuses.
When Jes Staley, a former Barclays chief executive, abruptly resigned in 2021 due to his ties to a convicted sex offender, Jeffrey Epstein, who committed suicide in prison while awaiting trial on new charges.
Unlike NatWest, Barclays released Mr. Staley's severance package the same day he announced his departure.
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