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Scarborough Building Society chief's £2.4 million payout - COMMENT ON THIS STORY
SCARBOROUGH Building Society boss John Carrier is to retire with a £2.4 million pension pot when he steps down next month, according to reports.
The chief executive, who was paid 344,000 in the year to the end of April, has faced criticism about the decisions he and the board have taken which led to the society being taken over by the Skipton.
A statement released by Scarborough Building Society yesterday did not dispute the figures but said the remuneration was "in keeping with the benchmarking we adopt for all our people".
But as the name of 'the Scarborough' is set to be scrapped, national financial writers have raised questions about the so-called merger, and two senior Scarborough business stalwarts, who are both former members of the building society, said the grounds for the takeover had not been fully explained, and that the board has underestimated the great loss felt over the name.
Highly-experienced Scarborough businessman Tom Pindar, a former chairman of the society, said: "I was a director of the Scarborough for about 40 years.
"The society made safe and sound progress from an organisation with assets of 1.4 million to one which was worth more than 1 billion. The board consisted largely of local people who cared greatly about the reputation and stability of the society. We never behaved in a risky manor."
He added: "Mr Carrier has assured me on various occasions this year that the Scarborough continued to be a prudent lender and always had 80 per cent of the money it had coming from private investors.
"As a board member I was appalled by the business model adopted by the pseudo banks like the Bradford & Bingley and Northern Rock which allowed them borrow 80 per cent of its money from the wholesale money market.
"There have been no local directors on the board now for some years and I believe that has led to a lack of concern about the interests of staff and local investors. I believe that was a mistake.
"I understand from Mr Carrier that the Scarborough had continued to lend responsibly but an increased risk of home repossessions and loss making sales, together with high prices in the wholesale money markets, were impacting heavily on its profitability. That is a good reason for seeking collaboration with another society.
"However, knowledgeable journalists in the national press have said that the Scarborough had been doing risky business in the last year.
"I can understand that a less experienced board might feel inclined to follow the pack and that might lead to it taking risks but I have no detailed knowledge that this is the case.
"I think the current board and Mr Carrier have underestimated the great sense of loss felt by people in the town and surrounding area and they would do well to try and mend a few broken fences."
Mr Pindar added that the Skipton could also do itself a favour by allowing the name Scarborough to be used on its branches in the town and at its head office on one of the main routes into the town.
The "merger" will also see the complete loss of the name of 'the Scarborough' and its 160-year history.
"I could not object to the name 'The Skipton in Scarborough'," he said.
Scarborough solicitor Richard Grunwell is another former director of the Scarborough. He said: "The problem is we haven't heard any of the detail and a lot of people are still mystified as to why this merger is going ahead.
"If the society was having problems and people had been told about them, then I for one might have understood – we deserve an explanation."
Articles in The Guardian and The Mail on Sunday have expressed critical views of the Scarborough's handling. The Mail on Sunday claimed that Mr Carrier will leave next month with a 2.4 million pot, and poor decision-making had seen the society "run into Scarborough sands".
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Saturday 26 May 2012
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