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Co-op Bank chief Niall Booker is set to earn £4.6 million in 18 months, it was confirmed yesterday, even as his firm announced annual losses of £1.3 billion.
The former HSBC executive will earn up to £2.9 million this year if the firm hits its turnaround plan targets, on top of a £1.7 million payment he has already taken.
The amount nearly matches a £5 million bonuses pot that the bank has said it will withhold from former directors who were at the institution prior to last year's crisis.
The bank issued an apology for past failings, but warned a return to profitability was unlikely before 2016.
Mr Booker, who took the top job in June, said the bank still had “significant issues” to resolve, having come close to collapse last year following the discovery of a £1.5 billion hole in its balance sheet.
Co-operatives UK vice-chair Nick Matthews warned that the resolution of these issues should not mean abandoning the bank's core ideals.
He told the Star: “The next phase will be the review of the bank's ethical stance but even the most rabid venture capitalist must see that there is no value in the bank if that is lost.”
The wider Co-op Group currently owns just 30 per cent of the bank after US vulture funds swooped on the other 70 per cent in 2013 in return for a "rescue" package of funding.
But it has admitted it still needs another £400 million from shareholders to cover additional legacy issues, such as the ongoing cost of PPI insurance mis-selling.
If the Co-op Group, which remains the largest single shareholder, chooses not to raise part of the additional cash its holdings are likely to be diluted further.
Mr Matthews added: “For the group, who no longer own the bank, this in an investment. At a time when cash is tight the board have to decide from amongst the things they need to invest in.”
The bank has been at the heart of wider difficulties at the Co-op Group as debate grows over how it will be run in future.
However a planned governance shakeup will take time and be a separate process to dealing with the bank, Mr Matthews said.
