Northern Rock senior executives receive secret bonuses

Senior managers and executives at cash-strapped Northern Rock are being paid secret bonuses at a time when the beleagured bank is being propped up by billions of pounds of public money.

The confidential payouts are detailed in company documents seen by The Mail on Sunday, which reports that human resources and training director Lynne Griffin received £21,250 as part of the scheme.

Other senior staff are eligible for the bonus, which amounts to a quarter of their gross annual salary every three months.

The paper states that in a letter to senior staff last month, chief executive Andy Kuipers said the bank's board of directors had agreed "an enhanced remuneration package" for employees deemed "essential to our continuing excellent operational performance".

In the letter, Kuipers said the scheme "must remain absolutely confidential and not be discussed with others", otherwise the recipient would forfeit the entitlement.

A spokesman for Northern Rock said the bank had introduced the policy to retain staff with "particular technical or specialist skills".

In September 2007, Northern Rock had to borrow £3bn from the Bank of England after suffering losses as a result of the credit crunch in the US. It is estimated the company now owes £26bn to taxpayers.

An emergency shareholders' meeting is scheduled for tomorrow (15 January) to discuss potential rescue packages.