Abbey bonus habit rapped

THE National Association of Pension Funds rapped Abbey on the knuckles for paying hefty bonuses to its bosses in advance of the bank's recovery.

The powerful NAPF said it had 'some concerns' about the payments and questioned whether they were 'appropriate prior to concrete evidence' of a successful transformation at Abbey, which lost £686m last year.

But though it is 'somewhat disappointed', it stopped short of calling for a rebellion at the annual meeting on 22 April.

The NAPF, which represents hundreds of UK pension funds, said Abbey has assured it that such 'exceptional payments ... are unlikely to be repeated'. So it recommends that members back the pay resolutions.

Abbey paid chief executive Luqman Arnold a cash bonus of £608,000 on top of £675,000 salary last year. Chief operating officer Stephen Hester got £455,000 cash, on top of a £520,000 salary.

Public criticism from the NAPF signals that this year's round of top company agms may see rebellions again. Abbey's new pay plan needs an agm vote.