Rescued Caja in Million Euro Management Pay-Off

 

Following recent news that senior management of the failed CAM Bank had awarded themselves multi-million-euro pay off's ahead of the central bank assuming control, it was revealed earlier this week that Novacaixagalicia paid out 23.6 million euros to three directors before they were removed from their positions.

The Galician savings bank was nationalized on Friday of last week after receiving almost 2.5 Billion Euros from FROB in exchange for teh Bank of Spain taking a 92.5% stake in the lender.

There have been reports that the Caja's Chairman, José María Castellano and CEO César González-Buenoy, asked for a number of senior management to receive early retirement. José Luis Pego, the former GM, received 10.8 million euros after taking early retirement at the age of 54; the head of real estate, Gregorio Gorriarán, 7.5 million euros; and the deputy GM Javier García Paredes 5.3 million euros. The latter was due to get a pay-off of 10 million, but he rejected 4.7 million of this amount because he believed it was excessive.

All three apparently asked for the payments to be awarded in one instalment, to include their pension entitlements. The current managers are investigating whether these pay-outs can now be legally withdrawn.

The Governor of the Bank of Spain has already described the pay-outs to CAM's management as being "scandalous", as have the PP opposition party. The Minister for the Economy seemed a little more resigned to the situation when she described them as "unacceptable to me, but we will have to see if these payments are legally in order [with the rules laid down by the savings banks by-laws]."

The Socialist Party's representative on the board at Novacaixagalicia, Mar Barcón, resigned on Tuesday in protest over the payments.