Gary Hoffman, Barklays vice chairman, will replace current Northern Rock chief executive Andy Kuipers, who will leave on August 31.

Hoffman's basic salary is £700,000 and he will also receive three separate payments of £400,000 in compensation for the loss of his participation in Barclays' long-term incentive plans.

‘I am excited by the prospect of leading the company back to a position of strength, delivering our plan and returning Northern Rock to private ownership as a thriving, stable business,'Hoffman said.

Ron Sandler will remain executive chairman of the company until October 1, when he will become non executive chairman.

Further reading:

Northern Rock job needs a star