THE chairman of Darlington Building Society has called for an end to a year-long dispute over executive pay.

William Baker Baker told the mutual's annual meeting the public row was damaging the company's reputation.

Mr Baker Baker spoke after one member raised concerns about chief executive Peter Rowley's £157,000 salary, car and bonus package.

Dr Ian Ross said he believed Mr Rowley's pay package was excessive compared with other, similar building societies.

He said: "Examining the accounts of the other peer group societies showed that Mr Rowley had the highest basic salary and the cost of employing him was almost £50,000 more than the average.

"That does not extend to staff salaries, where the average salary of employees was over £4,000 lower than the average among the society's peer group."

Dr Ross had raised similar concerns at the meeting last year and with a number of national newspapers since.

Mr Baker Baker told members: "What worries me about this campaign over the past year, which has been led by Dr Ross, is the risk it poses to Darlington Building Society.

"It is one of the greatest risks we face at the moment, the damage to our reputation."

He said that staff had a bonus scheme on top of their salaries to reward their efforts, and that comparing standard staff salaries with societies in other parts of the country was unfair.

Solicitor Robin Bloom said: "As members, we are proud of this society and if we were not proud, then we would vote with our feet."

Alistair Arkley, chairman of the Tees Valley Partnership, said: "I am concerned that so much has been said about remuneration. This is becoming a fashionable subject to talk about at the moment. As far as I can see, Darlington Building Society is well led and the salary is deserved."

David Kelly, managing director of Newsquest North-East, said: "I have followed with increasing frustration this media campaign mounted through two newspapers against Mr Rowley's remuneration package.

"I do not believe his salary is out of sync with other places because I would say his contribution to the society has been remarkable."

Others said they appreciated Mr Rowley had to be well paid so the society did not lose him to another company.

In a report to the meeting, Mr Rowley said last year had been one of the most successful in the society's 147-year history.

Pre-tax profits of £3m were up 30 per cent on 2002.

Mr Rowley said he expected trading conditions this year to be less favourable because of rapid house price inflation.