Bonuses to top executives are currently being reconsidered after yet another Payment Protection Insurance (PPI) scandal.
A top British bank may have to give back part of the £1.45million bonus which it awarded to its former chief executive earlier this year. The bank reported a loss for the first quarter of 2011, when it set aside a whopping £3.2billion to attempt to settle PPI mis-sale policy claims to its clients. Many other top British banks have also set aside large provisions for the same reasons.
The implications on paying out refunds has yet to be fully explored in what is actually believed to be the first time a big lender has reconsidered bonus awards for chief execs. Not only was the £1.45m bonus paid to the banks chief exec, but more than an extra £5m was then given to the banks five executive directors. Deferred in the form of shares until March 2013, and also, under the Financial Services Authority (FSA) rules, a claw-back can be given to any part of the bonus.
The former Liberal Democrat Treasury spokesman, Lord Oakeshott stated the large sum should not have been paid to begin with, also adding the bonus awards for other bank chiefs should be looked over again and dealt with. “No bank chief executive responsible for this gross consumer mis-selling scandal should have been paid a bonus,” he said. “The Treasury under both governments has been amazingly soft at controlling bonuses in the two state-owned banks.”
With the amount of PPI claims constantly on the rise, many individuals are questioning whether the refunds that are rightfully theirs are those that are being given to these chief executives. As many feel the pinch of the current economic climate, especially around this time of the year, uproar is occurring more and more as individuals challenge their mis-sold policies.
Sally Bowyer, Managing Director of Brunel Franklin said: “Everyone accepts that banks provide a valuable service and are entitled to make fair and reasonable charges for services. But people shouldn’t be sold PPI without being furnished with the full facts. PPI mis-selling cases serve as timely reminder of how careful we all need to be when taking out new loans and other credit card agreements.”
Learn more about PPI refunds and find out if you could apply for a refund today! Visit the website www.brunelfranklin.com or call Brunel Franklin, free, on 0800 051 54 51.