Letter from the Chairman to the Chairman
of Northern Rock
The Treasury Select Committee has asked for
further details on the recent changes to the board of Northern
Rock announced on 16 October 2007. Given the ongoing support being
provided by the taxpayer to Northern Rock, and our inquiry into
the events surrounding the need for such support, it is important
that we and the public remain informed about the current management
of Northern Rock.
The changes announced on the 16 October 2007
see four non-executive directors retire, but two remain with the
Board of Northern Rock. Under what criteria did non-executive
board members resign or were allowed to stay with the Board of
Northern Rock? Have any financial incentives or payouts been given
to retiring members of the Board of Northern Rock?
Adam Applegarth has resigned from the position
of chief executive, yet remains with the company until the end
of "the second phase of the strategic review process".
By remaining with the company until this time, will Mr Applegarth
receive any additional benefits or payouts that might not have
accrued had he left early? Also, will Mr Applegarth receive a
payout on leaving the company, and by staying until January 2008
will such a payout appear in the accounts of the company to be
published in 2009, rather than those to be published in 2008?
As well as this, Mr David Baker, Mr Keith Currie
and Mr Andy Kuipers have been demoted from the Board of Northern
Rock, yet remain officers of the company. What criteria were used
to decide between demoting individuals and dismissing them? Has
there been any decrease in pay or change in their terms of employment,
in view of this demotion?
I look forward to your comprehensive and prompt
21 November 2007