New chief executive for Northern Rock

British bank Northern Rock announced the appointment of Barclays director Gary Hoffman as its £700,000(€886,657)-a-year chief executive today.

The 47-year-old joined Barclays in 1982 and has held a number of senior roles, including chief executive and chairman of Barclaycard. His appointment means Northern Rock chairman Ron Sandler will revert to a non-executive role.

The nationalised Northern Rock said Mr Hoffman's basic annual salary will be £700,000 (€886,657), plus any entitlements from a new incentive scheme due later in the year.

He will also be compensated for the loss of various Barclays long-term incentive programmes. As a result, he will receive three separate payments of £400,000 (€506,679) each, the first on the commencement of his new job in October.

Mr Hoffman will replace Northern Rock's current chief executive Andy Kuipers, who stepped into the role in December following the departure of Adam Applegarth.

Mr Sandler said Mr Kuipers, who will leave the company after 20 years, had performed "admirably" in difficult circumstances.

Northern Rock was nationalised in February after the credit crisis forced the bank to seek emergency funding from the Bank of England last autumn.

Barclays said the decision to release its group vice-chairman and executive director had been made "reluctantly".

Chief executive John Varley said: "Gary has been with Barclays for 26 years and has contributed much during this time."

Mr Sandler described the appointment of Mr Hoffman as a "major step forward" for Northern Rock and said his skills and experience made him an outstanding candidate for the role.

Under a plan to slash the bank's assets and repay Government loans, Northern Rock has stopped its pro-active mortgage retention programme, with customers instead offered help to transfer their mortgages to other lenders.

As part of the post-nationalisation restructuring, staff numbers are being slashed from about 5,400 people to 3,400 by 2011, with most jobs going this year.