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The Guardian - UK
The Guardian - UK
Kalyeena Makortoff Banking correspondent

Virgin Money bosses in line for £6m if Nationwide takeover goes ahead

Virgin Money logo
Richard Branson’s Virgin Group, Virgin Money’s biggest shareholder, has confirmed it would approve a 220p a share deal. Photograph: Geoffrey Swaine/Shutterstock

Banking bosses at Virgin Money are in line for a £6m windfall if Nationwide Building Society pushes ahead with a proposed takeover of the lender, with more than half of that sum to be pocketed by its longtime chief executive, David Duffy.

Public shareholder data suggests that 13 executives, board members and senior staff are poised for big paydays from the potential £3bn deal, after accumulating stock through years of service at Virgin Money, which was co-founded by billionaire Sir Richard Branson in 1995.

Nationwide’s takeover offer, which would be the largest UK banking deal since the 2008 financial crisis, would be most lucrative for Duffy, who would gain £3.5m from the buyout of his nearly 1.6m shares.

If approved, the deal would create a combined group with £366bn in total assets, nearly 700 branches and more than 23 million customers.

The 220p a share sale would be Duffy’s largest single payout linked to his time at Virgin Money, which he joined in 2015, when it was known as Clydesdale and Yorkshire Banking Group (CYBG). The group subsequently changed its name after a £1.7bn takeover of Virgin Money in 2018.

It would trump the bumper package that Duffy received in 2019, when his pay more than doubled to £3.4m due to bonuses reaped from a demerger of CYBG from National Australia Bank four years earlier.

Any share payouts from Nationwide’s takeover would be on top of the annual salary, benefits and bonuses that Duffy receives for his day job as chief executive.

Shareholder data suggests that the second largest payout would be reaped by Virgin Money’s senior adviser, Hugh Chater. He is due for a payday of nearly £880,000 if the deal proceeds, thanks to his accumulation of nearly 400,000 shares. Chater moved into the role in September after more than seven years at Virgin Money, where he previously led the mortgage business and served as a chief commercial officer.

The head of Virgin Money’s legal team, James Peirson – who sits on the lender’s executive team – would be due a £691,812 windfall, followed by chief financial officer Clifford Abrahams, who is set for a £415,494 payout.

About 13 senior bosses will be due for a combined £6m payout, according to Guardian calculations. Virgin Money declined to comment on the payouts.

Nationwide has until 4 April to provide a formal offer, which will then have to be put to Virgin Money shareholders. However, Branson’s Virgin Group, the largest shareholder, confirmed last week that it was prepared to approve the deal.

Branson is expected to reap about £414m from the deal because of his remaining 14.5% stake in Virgin Money.

Virgin Group, which is 100% owned by Branson, may also be in line for further royalties linked to use of the Virgin Money name. Estimations based on last year’s £17m charge, suggest Nationwide could be on the hook for at least £68m, as well as any break clauses, until it phases out its use over four to six years.

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