No golden handshake for Ridley

Former chairman of stricken bank Northern Rock will not be receiving a golden handshake after resigning late last week.

Matt Ridley had been in post as chairman for the past three years, earning a salary of £315,000 a year. Many thought that he would receive a handsome payout after his resignation, but according to recent reports Ridley will not receive any payout.

Northern Rock became the victim of the first run on a bank in over 150 years after Northern Rock had to ask the Bank of England for an emergency loan.

Once this became public news many of the bank's 1.5 million savers rushed to take out their money from the bank, with over £2 billion being withdrawn in a matter of just days. Share prices also plummeted, and the bank has been left with a seriously scarred reputation and has now had to cut many of its mortgage products in an economy driver, as well as engaging in talks over the sale of some or all of the business.

Although Ridley had offered to resign earlier, he had been asked to remain in post to face a grilling from the Treasury Select Committee, and was accused by the committee of "damaging the good name of British banking".

However, Ridley stated that there was no way that the problems experienced by the bank could have been predicted.

He stated: "We were subject to a completely unprecedented and unpredictable closure of the world credit markets."

A new chairman has been appointed and is awaiting approval by the Financial Services Authority. Bryan Sanderson is the former chairman of Standard Chartered and Bupa.

Tom Smith
24th October 2007

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