TSB Bank Chief Paul Pester Forfeits £2M Bonus in Wake of IT Meltdown
The chief executive officer of TSB bank will forfeit his £2 million annual bonus payment in the light of a mass IT failure that left thousands of customers locked out of their online accounts, as MPs accused the leader of being “extraordinarily complacent”.
During a bruising evidence session before the Treasury select committee, TSB chief executive Paul Pester and the bank’s chairman, Richard Meddings, said they had received 40000 complaints about the outage but did not know exactly how many of the bank’s 1.9 million online customers had been affected.
Meddings told MPs that Pester had volunteered to give up a £2m bonus associated with the migration to a new IT system, hinting that other executives could also have their bonuses slashed. But Pester could still receive up to £1.3m in other bonuses for 2018, on top of a further £1.3m in basic pay, benefits and pension contributions.
TSB Bank plc Logo
Pester declined to predict when the problems, which have been affecting customers for 10 days, would be fixed. The committee chair, Nicky Morgan, accused Pester of being “extraordinarily complacent” after he said the bank’s move to a new IT system, which triggered the problems, had mostly run smoothly.
Pester insisted that 95% of customers were now able to log in to the bank’s mobile app and website without problems.
However, MPs on the committee read out a series of emails and tweets from customers that indicated ongoing chaos. One customer said they had spent 14 hours on the phone to customer services, while another said they had been left unable to pay their gas and electricity bills and a third said they risked a house purchase falling through because they could not access bank statements.
Morgan questioned the notion that the IT problems were mostly fixed, saying customers had been put in an “impossible financial situation”.
The accountancy firm Deloitte is advising on the bank’s compensation strategy, while TSB has recruited IBM to fix the IT problem and the City law firm Slaughter and May to investigate the cause.