Santander chief still earns £1.8m for job with toxic RBS unit

. . . despite leaving controversial role four years ago

SANTANDER’S chief executive is being paid £1.8m a year for a job which oversaw a toxic unit at Royal Bank of Scotland – despite leaving the role four years ago.

Nathan Bostock gets the seven-figure sum to compensate him for bonuses which he gave up when he jumped ship from RBS.

The revelation will spark fury because the money relates to his time as head of risk and restructuring at RBS, a role in which he was responsible for overseeing its notorious Global Restructuring Group.

And an MP has demanded an inquiry into lucrative pay deals for undeserving bosses.

Tasked with rescuing failing businesses during the Great Recession, the GRG has instead been accused of loading them up with vast fees to boost its own profits. And a report commissioned for the City watchdog squarely blames management for fostering this toxic culture.

Critics last night branded Bostock’s payments a reward for failure and called for them to stop. Labour MP Wes Streeting, a member of the Treasury Select Committee, said: ‘For GRG victims this will feel like a huge punch in the guts.

‘It’s past time for company boards to reflect on the collective damage these sorts of awards continue to do to the reputation of financial services. Perhaps it’s time for a Treasury committee inquiry on rewards for failure, where we could haul in those responsible for dishing them out as well as those receiving them.’

Liberal Democrat leader and former Business Secretary Sir Vince Cable said: ‘Santander has now got a big problem on its hands. Its top hire from RBS is turning out to be a public relations liability. Small businesses will simply not understand why he has been rewarded on that scale, and we should be calling on the bank to stop these payments.’ Bostock, 57 – pictured above with former Mayor of London Boris Johnson – was head of risk from 2009 to 2013 before being promoted to finance director – a job he did for just ten weeks before joining Santander, where he served very briefly as deputy chief executive before taking the top job. He was paid £4.7m for running the bank last year according to its annual report. But the small print reveals he was also given £1.8m as a buyout for RBS bonus awards which he lost when he was poached.

It is the third such payment handed to Bostock, meaning he has picked up £5.4m from the deal so far. It is understood he will receive one more £1.8m payment this year.

Because the money is being paid by Santander, it is not subject to the clawback rules which would have applied at RBS – meaning it is not possible to recover the cash should doubts emerge about Bostock’s conduct while working there.

The married father of two, who lives on a farm in rural Kent, has faced questions since Cable blamed him in Parliament for failings at the GRG.

It is particularly sensitive because Santander is seeking to portray itself as a champion of small businesses, and is bidding for a slice of an £800m fund to boost competition in business banking operations, set up by RBS as a condition of its £46bn bailout.

There is no suggestion that Bostock was personally responsible for any wrongdoing at the GRG, which was one of many divisions he looked after at RBS.

The board and Santander’s Spanish head office have investigated and are standing behind him. A Santander spokesman said: ‘Nathan’s pay and bonus are agreed by our parent Santander Group and the Santander UK remuneration committee and board, based on performance which was evaluated as outstanding this year. The buyout is a contractual entitlement that was agreed when he was appointed to Santander UK.’