Former Barclays chairman joins Northern Rock
Former vice chairman of Barclays, Gary Hoffman, has been named as Northern Rock’s new chief executive.
Newcastle-based Northern Rock will pay Mr Hoffman almost £2 million over two years to manage the crisis-torn bank.
Mr Hoffman’s basic salary is £700,000 plus three separate payments of £400,000 in compensation for the loss of his participation in Barclays’ long-term incentive plans.
Hoffman, who was with Barclays for 26 years, will replace Andy Kuipers, current chief executive, who is to step down at the end of August after 20 years service. Mr Kuipers is the last member of Northern Rock’s original board to leave the bank after last year’s crisis.
Commenting on his new role, Mr Hoffman said he was excited by the prospect of guiding the bank back to a strong position.
Northern Rock encountered difficulties last autumn when it was no longer able to fund mortgage lending by borrowing in wholesale money markets.
After rejecting takeover bids from the board of Northern Rock and a consortium led by Sir Richard Branson’s Virgin Group, the Government rushed through legislation to nationalise the bank in February.
Since that time, the bank has announced plans to shed approximately 2,000 jobs by 2011 and cut its residential mortgage lending by half.
Former Lloyds of London boss, Ron Sandler, who was put in charge of the troubled bank by the Government, will became non-executive chairman when Mr Hoffman assumes his role in October.
Speaking of Mr Hoffman’s new appointment, Mr Sandler said it will be a major step forward for Northern Rock and he will be an outstanding candidate for the task at hand.
Mr Hoffman joined Barclays in 1982 and has been the bank’s chairman since 2006. Commenting on his departure, John Varley, chief executive of Barclays, said he was reluctant to let Mr Hoffman go but this is a unique opportunity for him.
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