Perks get better at Abbey

ABBEY National investors interrogated their board over the £1.8m pay-off for departed wholesale banking chief Gareth Jones and how the bank lost £95m on Enron despite devoting five pages of its accounts to 'risk management'.

The punters might have been angrier had they known that executives have beefed up their redundancy terms to include pay-offs of up to three times salary and pledges to find them new jobs on a trial basis.

The amendments to board contracts run to seven pages, replacing a simple three-line clause. Abbey promises to 'make every effort' to avoid redundancy, and to redeploy managers into 'suitable' jobs. 'Location and domestic arrangements may have to be considered.' Managers with long service 'have a greater claim'.

The amendment, brought in on 1 March, 2000, may comfort chief executive Ian Harley, with 25 years' service. He was seen to be for the chop if Abbey had agreed a merger with Bank of Scotland in 2000. More recently, it escaped a hostile bid from Lloyds TSB.

Profits fell 2% last year when £1.24m was paid out in board bonuses. Abbey was attacked for its financing of the Birmingham M6 relief road, through 27 miles of green belt.

Stephen Hester joins as finance director from Credit Suisse First Boston.