Ron Sandler was dubbed “the second best-paid person in Newcastle” yesterday after it emerged that the executive chosen by the Treasury to rescue Northern Rock is a non-domiciled taxpayer. Only Michael Owen, the Newcastle and England footballer, was likely to earn more, critics suggested.

MPs, unions and shareholders were angered that Mr Sandler, who will receive £90,000 a month at the nationalised bank, is one of the 115,000 people who, for tax purposes, are not domiciled in Britain. Ann Godbehere, the bank’s new chief financial officer, is also a non-dom.

Although Mr Sandler, a former insurance executive, attended university and has spent much of his adult life in Britain, he was born in Rhodesia – now Zimbabwe – and carries a German passport. This allows him to pay no tax in Britain on earnings he may make overseas. Ms Godbehere, who will be paid £75,000 a month, has dual Canadian and British citizenship.

Vince Cable, the deputy leader of the Liberal Democrats, said that Mr Sandler “presumably is now becoming the second best-paid person in Newcastle after Michael Owen.”

He added: “ At least Michael Owen pays his taxes here.”

Robin Ashby, founder of the Northern Rock Small Shareholders’ Group, said: “[Shareholders] will look pretty much askance at what I’d deem to be tax exiles taking over their company”.

A Treasury spokesman said that Mr Sandler and Ms Godbehere would pay tax on their income in Britain.

Paul Kenny, general secretary of the union GMB, said: “The Chancellor has no alternative but to ask Mr Sandler to end his nondom tax status and become a resident taxpayer.”

What the tax status means

— Non-doms do not pay income tax on overseas income or gains

— Assets bought with foreign income and brought into the UK currently escape tax, but this will change from April

— Non-doms pay income tax, capital gains tax (CGT) and inheritance tax on all their UK income and assets

— Income tax is charged depending on what they earn in the UK

— Non-doms must also pay inheritance tax at 40 per cent on their UK estate if it is worth more than £300,000, even if they no longer live in the UK

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive