CLYDESDALE Bank chief executive David Duffy is to get £1.5 million of shares when the business floats on the stock market.

The award is equivalent to 150 per cent of Mr Duffy’s basic annual salary.

Finance director Ian Smith and chief operating officer Debbie Crosbie will each get £450,000 of stock, the same value as their annual salaries.

Loading article content

The share awards are confirmed in a prospectus document issued by National Australia Bank which reveals more details on the proposed initial public offering (IPO) expected to take place in early February.

In the document NAB said: “The awards are designed to support the retention and motivation of the leadership team after [the] UK demerger.”

The awards will vest after three years and are subject to performance criteria. 

All Clydesdale and Yorkshire Bank staff are to get £500 of shares in a move which is expected to cost around £8.5m, including the executive awards.

The document confirms Mr Duffy’s £1m annual salary, the same as Ross McEwan at Royal Bank of Scotland and marginally behind the £1.06m Antonio Horta-Osorio gets for running Lloyds Banking Group.

The prospectus also shows Mr Duffy gets an annual cash allowance of £180,000 instead of an employer’s pension contribution and a car allowance of £30,000.

The 54-year-old also has a £35,000 accommodation allowance which runs to June 4 next year and which can be extended by the bank’s remuneration committee.

The bank said its remuneration complies with all regulatory requirements and added its “overall philosophy to remuneration is designed to support both its culture and its business strategy. It is based on the approach that remuneration should be linked to the performance and behaviour of an individual, business results, shareholder outcomes and fair customer outcomes.”

NAB is pressing ahead with the flotation which will see 25 per cent of Clydesdale Bank’s stock being put up for grabs for new investors.

The remainder will continue to be held by NAB’s existing shareholders.

Share dealing is expected to start on February 2.

Mr Duffy said: “This is another important step towards becoming independent for our Clydesdale and Yorkshire Bank brands. We will be able to shape our own strategy, build a better bank for our customers, and deliver long-term and sustainable growth for our shareholders.

"We already have a strong customer franchise and now we have a great opportunity to challenge the market with enhanced products and outstanding customer service."

In the document NAB says it has engaged in several discussions with potential buyers of Clydesdale since 2009.

It said: “However, no proposal to purchase CYBG Group has emerged from these discussions on terms and conditions acceptable to NAB.”

NAB chairman Michael Chaney said the directors unanimously recommend that shareholders vote in favour of the demerger at a meeting being held in the Melbourne Convention and Exhibition Centre, Australia, on January 27.

He said: “Having assessed a number of alternatives, the NAB Board considers the demerger, in conjunction with the opportunity to undertake the IPO, is the best exit option and is likely to enhance value for NAB shareholders over the long term.

“The NAB directors are of the view that [Clydesdale] is now in a position to be demerged to NAB shareholders and be listed as a standalone retail and SME bank with a strong franchise across its core regional UK markets, a strong balance sheet and capital position, a robust

business plan and operating platform, as well as an experienced management team.”

The demerger scheme document shows Clydesdale chairman James Pettigrew will see his annual fee rise from £300,000 to £360,000.

Deputy chairman David Bennet will get £165,000 while senior independent director Richard Gregory will see his fee reach £162,500.

Other non-executive directors will be paid between £80,000 and £110,000.

Separately, Clydesdale has also beefed up its senior ranks with two hires from rivals.

Gavin Opperman moves from Standard Chartered to become director of customer banking while Kate Guthrie leaves Lloyds to the newly created position of human resources director for Clydesdale.

Mr Duffy said: “Both Kate and Gavin have first-class track records of building dynamic and successful service-led cultures across large organisations. They are both great additions to help us deliver our ambitious customer support and growth plans.”