Boss of tainted TSB quits at last – with £1.7m payoff
The boss of tainted TSB will walk away with a payoff of at least £1.7million after finally resigning over its disastrous IT meltdown.
Paul Pester quit the bank following a botched computing upgrade that left 1.9million users unable to access accounts and led to a wave of fraud.
he resisted calls to go for months, but it is thought fresh IT problems this week were the final straw and he has now left.
he will get at least a year’s salary of £1.2million, plus a bonus of £480,000 for previous years’ work.
he may also be handed a further £1.2million under other bonus schemes from 2015 and 2016, although much of this is likely to be withheld.
Critics said the payoff will be seen as a reward for failure that will further tarnish TSB’s reputation.
Luke hildyard, of the high Pay Centre, said: ‘In an economy that’s endured meagre wage growth for the past decade, a chief executive who walks away with £1.7million having presided over a fiasco will struggle to attract sympathy.
‘It is unfortunately all too commonplace for UK businesses to reward those at the top very generously regardless of performance, while looking on low and middle earners as a cost to be controlled.’
Mr Pester, 54, who had run TSB since it split from Lloyds in 2013, quit with immediate effect. he will be replaced temporarily by TSB chairman Richard Meddings while a new boss is found.
he was an outspoken critic of high pay at big banks who wanted TSB to seem different. he hit out at ‘rewards for failure’ in a newspaper article months after launching the lender and said his mission was to restore trust.
‘Banks have let you down and you deserve better,’ he wrote.
his departure will be seen as a dramatic fall from grace.
TSB’s problems began in April when it switched customers’ bank accounts to a new computer system built by its Spanish owner Sabadell. Within hours it became clear that the change had gone horribly wrong, with wages unpaid and mortgage applications delayed, meaning house sales fell through.
Criminals quickly launched more than 10,000 fraud attacks, often posing as TSB staff who could get customers’ money out of the bank for them, but stealing families’ life savings instead.
Mr Pester faced damning criticism for his handling of the crisis. Andrew Bailey, head of the Financial Conduct Authority, accused the chief executive of wrongly playing down the impact of the IT problems. The Commons Treasury select committee said he was damaging trust in banking and should resign immediately.
Its chairman, Nicky Morgan, welcomed his departure yesterday. ‘Since the IT problems at TSB began, Paul Pester set the tone for TSB’s complacent and misleading public communications,’ she said.
Mr Meddings praised Mr Pester for his ‘enormous contribution to TSB’, and said that many of the initial problems caused by the online meltdown had now been dealt with.
however, he added that the time was right for a change.