RICHARD PYM, the new chief executive of Bradford Bingley (BB), will receive a remuneration package worth up to £2.25 million as he tries to turn around the embattled bank that yesterday saw its £400 million rights issue shunned by most investors.
Mr Pym, former chief executive of Alliance Leicester (AL), will get a basic salary of £750,000 plus £750,000 in cash and £750,000 in share options over the next year. In addition he will receive a one off grant of £1.5 million of share options at yesterday's share price of 54p.
His appointment is an attempt by the bank to draw a line under the turbulence surrounding its £400 million rights issue, which attracted a take-up from just 28 per cent of its investors. This has left about £288 million of stock with UBS and Citigroup, the underwriters, which have five days to place it in the market. Any unsold stock will then go to the underwriters or sub-underwriters, which include six of Britain's biggest banks and four institutional investors.
Yesterday Mr Pym, who will stand down as chairman of retailer Halfords, said he would review BB's business and outline his strategy at the bank's trading statement in October. But many shareholders and analysts expect that he will stabilise BB before trying to sell it.
Mr Pym, who "missed" being a bank executive in the past year, said his first few weeks would be spent "listening and learning".
"I haven't seen anything to date that I don't feel confident we can resolve," he said. Markets would need to recover from current levels before most banks would even consider acquisitions.
Mr Pym had a reputation at AL for being ultra cautious on the buy-to-let market. Analysts called him a "safe pair of hands" but questioned how much scope he had to turn around BB, given 75 per cent of its mortgage book is in riskier areas such as buy-to-let and self-certified mortgages.
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