Today, ironically 24 hours after another IT meltdown, the Bank announced that Paul Pester, TSB’s Managing Director, will be leaving with immediate effect. Richard Meddings will take over the running of the Bank until a new Chief Executive can be found.
Given that the Union and the Treasury Select Committee both told Mr. Pester to go months ago, following the biggest IT meltdown in corporate history, the question which many members are left asking is why now?
In June, Richard Meddings said to the Rt. Hon. Nicky Morgan MP, Chair of the Treasury Select Committee that:
“ We recognise that we still have areas where we need to improve performance for our customers and we do not underestimate these remaining issues. The important point is that this progress has been achieved under the leadership of Paul Pester, who continues to have the full support of the TSB Board”.
“TSB were warned about the problems. We told TSB that staff working on migration were saying to us that the new system wasn’t working properly but the Bank’s senior management team arrogantly went ahead and introduced it anyway. Now is not the time for recriminations but Mr. Pester, Managing Director of TSB, Helen Rose, Chief Operating Officer and Carlos Abarca, Chief Information Officer should all be updating their CVs.”
So, why has the Board’s support been withdrawn now. The only conclusion we can reach from this sorry episode is that the TSB Board has seen a draft copy of the report from Slaughter and May and it makes for very uncomfortable reading for Mr. Pester. Rather than wait for that report to be published fully, which it will be following the Union’s campaign with MPs, Mr. Pester has concluded that it’s better for him to go now, at a time of his choosing, rather than be hounded out of the organisation at a later date. Whatever the reason, Mr. Pester was ultimately responsible for the biggest IT fiasco in banking history that has so far cost TSB more than £176 million. Normally in these cases, failed CEOs leave with large pay offs. TSB has said “Paul will be paid in line with the bank’s remuneration policy and the terms of his contract. The release of variable pay will take into account the outcome of performance conditions as well as ongoing regulatory and independent investigations”. Given the havoc he created Mr. Pester should get no variable bonus payments whatsoever. The Union will be looking at any payments made to Mr. Pester carefully and any attempt to pay him for failure will be the subject of legal action.
Last week saw the departure of Rachel Lock, Ian Firth and Nigel Gilbert and we believe that Helen Rose, Chief Operating Officer and Carlos Abarca, Chief Information Officer, should also go once a new Chief Executive is appointed.
It’s normal in these circumstances to wish individuals all the best for the future. In respect of Mr. Pester it would be hypocritical for us to do that. He was responsible, together with Ms Lock, for a disastrous employee relations strategy and as he spends more time with his 8 surfboards on Fistral beach, we will continue to look after the interests of our members. Mr. Pester once said: “Life is full of setbacks. The people that succeed are those that smile, step back, have a breath and then carry on.” In the fullness of time, no doubt Mr. Pester will be able to take his own advice.