Critics slammed Cheshire’s ‘mismanagement’
THE Cheshire Building Society will formally become part of the Nationwide today as part of a merger which attracted the ire of a small band of savers.
The Financial Services Authority (FSA) received just 53 written submissions regarding the deal which expressed concerns over the implications for the government’s financial compensation scheme, the absence of a member vote and the rewards for Cheshire’s directors following their “alleged mismanagement of the society”.
Both the Office of Fair Trading and the FSA have approved the merger. As part of the process the FSA listed the details of correspondence from concerned members of the public.
Six people said there should be no payout for the directors of the Cheshire which made a loss in its last trading year and was forced to close branches.
The FSA’s report stated: “Six representers said that the directors of the Cheshire – and in particular the chief executive – will be unjustly rewarded for their alleged mismanagement of the society by receiving what they described as very generous termination payments and/or that they should not receive any such payments.”
Chief executive Karen McCormick has received around £298,000 which includes redundancy pay of around £55,500, 12 months’ pay and up to a further three months’ salary. However, she has received no performance bonus.
Some 24 were unhappy the merger was not put to a membership vote, while 29 who held money with both societies said the deal would leave them with savings above the £50,000 government compensation threshold.
