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Bosses won't get a bonus this year

Chris Morris
24/ 9/2008

BOSSES at the Cheshire Building Society say they will not receive a performance bonus this year – but they still remain in line for substantial payouts when they leave the firm.

Although it had been possible to receive a ‘performance-related bonus’ under the terms of their contracts, it has been revealed this week that directors and chief executive Karen McCormick will not be receiving a payout in 2008.

However they can still qualify for a final payment equivalent to a full year’s pay when they eventually leave the company sometime after its merger with rival Nationwide.

A spokeswoman for the Cheshire said: "There will not be any bonuses this year because the remuneration committee, who meet a couple of times a year, felt that under the current market conditions it would not be appropriate to pay a performance related bonus."

Mrs McCormick is on a 12-month rolling contract and will be staying on at the Cheshire in a non-board role when the Nationwide takes over the Macclesfield-based mutual for "up to and including a year", it has been stated.

If the former J Sainsbury’s Plc executive’s new job ends, she could still pick-up a full year’s pay – which could be anything up to £224,000 based on her 2007 salary.

A spokeswoman added: "Her (Karen McCormick’s) contract entitles her to a year’s notice period and it would have to be paid in full. She will be treated under the terms of her contract like everybody else."

The Castle Street-based Society was unable to confirm last week when the full details will be revealed, saying it would most likely be in the cessation accounts – which would be produced in late 2008.

However, a spokesman this week added: "All arrangements, although not finalised, in relation to accounts will be in the merger notification, which will be sent to members in mid-October."

The Cheshire, which has 444,000 members, 45 building society branches, 13 estate agent outlets and £4.9billion in assets, has blamed the merger with the Nationwide on the property market slowdown and a controversial £11.5million commercial loan which resulted in "exceptional impairment charges".

Customers will be able to continue to use the Society’s outlets, but not the Nationwide’s services or branches. The deal is expected to be completed by mid to late December.

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