Free share scheme as new TSB bank sets out to reward staff

TSB staff are to be handed free shares worth £100 as part of a John Lewis-style reward scheme unveiled by the challenger bank yesterday.

As newly-created TSB Partners, 8,600 employees from the chief executive to front-line branch workers will also be in line for an annual performance-related award that could pay a maximum 15 per cent of salary. The bank, which is returning to the stock market this month as part of a 25 per cent sell-off by Lloyds Banking Group, said it wants to encourage a sense of shared ownership and safeguard levels of customer service. TSB reviewed the policies of other banks and drew inspiration from a range of retail businesses, most notably John Lewis Partnership.

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For the annual award to be paid, the bank and its staff must achieve customer service metrics and the group itself must be profitable. A second scheme has been set up that will deliver cash and shares to its executive team over five years to a maximum of 100 per cent of salary.

Chief executive Paul Pester, whose basic salary will increase from £600,000 to £700,000 a year, will be entitled to a maximum potential award of £1.68m – the equivalent to 65 times the current average pay of non-managerial TSB staff.

It means that TSB will comply with the European Union guidance that bonuses must not exceed salary, unless otherwise approved by investors.