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Failed HBOS chief will take pension of £572,000 a year
Paul Waugh, Deputy Political Editor17 Feb 2009
THE senior banker blamed for the crisis at HBOS came under fresh attack today as it emerged that he is in line for a "scandalous" pension of more than half a million pounds a year.
Sir James Crosby, who was forced to quit as a City regulator last week, is due to get an annual income of £572,000 after building up a pension pot of £10.4 million. The Liberal Democrats today urged Sir James to forgo the payout, given the crisis the bank now faces.
The proposed pay-out will cause further embarrassment to the newly created Lloyds Banking Group, which took over HBOS this year.
Taxpayers currently own 43 per cent of Lloyds and HBOS and Chancellor Alistair Darling is expected by many to further nationalise the bank amid plunging share prices. The bumper pension, the details of which are buried in HBOS's annual report published last week, heaps further pressure on to Sir James.
He resigned as deputy chairman of the Financial Services Authority after claims that he sacked a whistleblower who warned the bank that it was expanding too fast.
Sir James was chief executive of the merged Halifax and Bank of Scotland, overseeing its much-criticised reliance on wholesale credit markets. He left the firm in 2006 and successor Andy Hornby was in charge as the bank came close to collapse last year when worldwide credit dried up.
As the Standard revealed Sir James's pension deal today, Lib-Dem Treasury spokesman Vince Cable said it was proof of the "outrageous" payments overseen by HBOS. "This just confirms the stench that is emerging from this completely failed and badly-run bank over which he presided for years," Mr Cable said.
"Taxpayers and HBOS shareholders have suffered so grievously at his hands that I think he does have a moral obligation to repay some of the scandalously overgenerous payments he has received." Mr Cable added that a "further insult" to taxpayers was that Sir James would have had full top-rate tax relief on his pension contributions.
Sir James joined the Halifax when it was a building society and became chief executive in 1999, leading the merger with Bank of Scotland in 2001 and pushing its rapid growth from then on.
When he stood down from HBOS he was earning £858,000 and collected bonuses of £2,147,000 between 2002 and 2006. The bank's annual reports show he will earn a pension of £572,000 a year from a pension pot which was worth £10.4million at the end of 2006.
Sir James, who left HBOS in 2006 aged 50, insisted last week that there was "no substance" to the allegations made by whistleblower Paul Moore. He said he was resigning from the FSA because he did not want to make the regulator's task more difficult.
A spokeswoman for Lloyds confirmed that Sir James's pension would be £572.000 a year. His successor, 42-year-old Mr Hornby, is in line for a pension of £184,000 a year from a pension pot of £2 million.
Reader views (25)
How can a man who helped to kill HBOS get a pension like this? surely this money should go towards damages to the Bank.
- Stan White, leeds, 18/02/2009 07:39
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There are 3 things which will sort out this country...Civil war, farming, and markets.
Once more a nation of gardeners, fishmongers, butchers, bakers and candlestick-makers; trading our wares in the high street. Upstairs, downstairs. Workhouses, knocking shops, and stovepipe hats! Victorian times reborn!
Pass my penny-dreadful!
- Jock, London, 18/02/2009 03:14
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Fat cat pay! Bonuses! Huge pension pay offs. Sorry, what about all the customers/savers whose 'interest' has all but been wiped out by these so called bankers. And I take issue with Messers Cameron et al, no-one in banks, junior or senior positions should be paid a 'bonus'. Surely thats what their salary is paid for, a days work. Or maybe everyone in the whole country deserves a bonus then. Capitalism gone mad.
- Geoff, london, uk, 17/02/2009 22:01
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No doubt Sir James is thumbing his nose at the HBOS shareholders as he reads this. What does he care? He's got his wad. It' a case of 'I'm all right James'. Personally, I won't be touching any HBOS/Lloyds product with somebody elses 10metre bargepole.
- Joannie, London, England, 17/02/2009 21:04
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His reputation is down the loo with the poo. But with a pension like that does 'Sir' Delboy worry all the way to the Bank?
- Kered Ybretsae, Nürnberg Germany, 17/02/2009 19:06
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He did'nt work as hard as I did for 52 years for 10k pension,with 12 years in the Navy,I am looking forward to something better when I get up top.
- David,Chertsey, Chertsey.UK., 17/02/2009 18:15
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Why? This banker has already cost me over two grand in lost HBoS share value and some folk have lost oddles more. And he wanted to regulate other banks too - my God what a brassed neck so un so. What about him helping me and other pensioners along out of his half a million quid a year pension. Me thinks no chance so I hope he chokes on it
- John, Leighton Buzzard, Beds, 17/02/2009 18:02
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I hope he chokes on his truffles and caviare and champagne what a gross betrayal of all shareholders and savers
I cannot write anymore such is my anger
- John, London UK, 17/02/2009 17:35
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Disgraceful. This has nothing to do with capitalism and everything to do with a corrupt elite in business and govt in the UK. Is it any wonder that the UK is quickly on its way to bankruptcy with the culprits grabbing everything they can while you pay for it. You will only have a proper society if good are rewarded and bad penalised. This never happens any longer in the UK - J Smith, Lords taped offering law changes for £, etc - all found not guilty. Who are they kidding? You will need to kick them out and penalise all of them if you are going to have any hope for a functioning society going forward. How did the absolute worst rise to the top in the UK? Why?
- Kr, Florence Italy, 17/02/2009 17:14
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any chance of a gold plated, ring fenced pension if i
screw up?
i'm prepared to do what's required to screw up big style if it'll help.
- M.O'Brien, london.uk, 17/02/2009 16:44
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The problem in this country is we have too many Lords and Ladies and not enough Ladies and Gentlemen - if you get my meaning.
- Charles, London, 17/02/2009 16:40
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Its not even suprising anymore is it? so many times before has it happened, Oh youve broke the bank? here have a couple of million...oh youve lost 10billion of the taxpayers money, never mind heres is your nice big pension pot on which to retire on. Meanwhile all the little agency staff and branch staff struggle on on 13-18k a year what a JOKE!
- Alanj, London, 17/02/2009 16:39
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I am reluctant to criticize the income of bank executives anymore, I cant call them earnings, as quite simply I'm about to join them. This week I had a letter from the Pensions Service, that in a few months on my eightieth birthday my pension will be increased by 25p, yes twenty five pence , a week.
Naturally I'm overjoyed at this new found wealth, but somehow it does not quite compensate for loosing two thirds of my Equitable Life pension, over the last ten years. But I do now understand why Gordon Brown has chosen to ignore the Parliamentary Ombudsman's findings that as the government was partly responsible for my Equitable loss, they should compensate me. THEY HAVE NO MONEY HAVING SPENT IT ALL BAILING OUT THE BANKS SO THAT BANK DIRECTORS COULD RECEIVE VAST PENSIONS AND BONUSES . GOOD JOB WE HAVE EMAILS, 25P WOULD NOT COVER THE COST OF A FIRST CLASS STAMP IF I HAD TO SEND YOU A LETTER.
- Alan Green, woodford green, 17/02/2009 16:37
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This is old news - focus on the real culprits the PM !!!
- Maronuchi, london, 17/02/2009 16:29
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Heads he wins tails he wins.
- Mike Melbourne, Bedford England, 17/02/2009 16:17
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Welcome to Britain. Our slogan is:
"Reward for failure".
- Marc, Harrow, UK, 17/02/2009 16:08
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Such payments are beyond justification. The continuing debacle will lead to more and more Public dissatisfaction and in due season there will be Community trouble. On the one hand we are all encouraged to be good stewards but if our so called Peers are abusing the systme then the inevitable will happen.
As a Knight of the Realm this man should take the lead and fall on the sword that now we know unjustifiably touched his shoulder
- Martin Clarke, london, 17/02/2009 15:59
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When is the government going to stand up and stop this lunacy? Or are we going to continue to allow bankers to pocket obscene amounts of money while our economy is in ruin?
- Elsie, London, 17/02/2009 15:54
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Stench from this rotten midden (dung heap) is what this is.
Why aren't these frauds (alleged) being prosecuted and stripped of their medieval sychophantic 'titles'?
Do we just sit back and fume helplessly?
Have we forgotten so easily the contempt and arrogance that the banks treated their customers?
Do we ignore how with billions of our hard earned money these banks shore up their fraudulent losses instead of providing capital to homeowners and small businesses?
Where's our fighting spirit? have we turned into a nation of voyeurs?
- Gordon, mexico, mexico, 17/02/2009 15:44
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There is something very deeply wrong with the moral ethics in this capitalist society, where proven failure and incompetence is so obscenely highly rewarded, only because it happened at the highest level, and the guilty are allowed to keep their fraudulently gained benefits from their years of misrule. This money should be retrospectively reclaimed by the state. -Just as they would insist on payback on back-taxes where owed.
To the ordinary working man or woman , the value of these pensions is staggering, and all the Gov't seem to be able to do is wring their hands and say it's not really fair. -They should DO something about it. The Gov't should govern, not merely spectate from the sidelines,like the helpless butcher watching the opportunist dogs run off with the strings of sausages in their mouths!
- Huggy, cumbernauld scotland, 17/02/2009 15:38
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This is utterly outrageous!
His annual pension of £572,000.00 equates to approximately the average gross salary of 22 workers and more significantly this equates to what 48 workers on the minimum wage would get "in total" annually!
Shouldn't this man be investigated by the Serious Fraud Squad and then jailed if appropriate?
- Fraser, Telford Park, 17/02/2009 15:30
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Sir James wants us to focus on facts and not rhetoric.
Well it is a fact that we the taxpayer are bailing out HBOS with billions of our hard erned money. The Govt should not allow that he and other HBOS ex leaders employer clever lawyers to defend their positions in the collapse of HBOS - a collapse that has destabilised the financial system and our economy.
With the authority and responsibility they held (which led to their large pension pots) goes personal accountability for HBOS' demise. If Sir James isn't to blame and Lord Stevenson and Hornby don't believe they are personally culpable either, well would they like to tell us who is? Please don't insult us further by pointing a finger at an anonymous market as the cause of our problems - they are in serious denial if they either don't accept their parts in the mess or believe that taxpayers and the increasing thousands of unemployed will believe them.
One or more of them and other HBOS board members are personally accountable for the mess that the rest of us are paying for and those that are found guilty of gross negligence should not be allowed any further financial benefits of any kind including pension benefits.
- Mike, london, 17/02/2009 15:27
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Let's see how honorable Sir James is now!
- Sharon, London, 17/02/2009 15:15
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No wonder he's smiling like a cheshire cat..He resigned before his pension come under scrutiny and risked losing it and his reputation for screwing up.
- Dc, London, 17/02/2009 15:09
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A pension pot of £10.4million at the end of 2006 should be worth considerably less in Feb 2009 - or does this just apply to mere mortals?
- David, Lewes, East Sussex, 17/02/2009 15:06
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