RBS set to offer banker Antonio Polverino £7 million

Published on Thursday 13 August 2009 11:59

PART-NATIONALISED Royal Bank of Scotland has agreed a "golden hello" worth more than £7 million to hire a star banker, it was reported today.

RBS, which is 70% owned by the taxpayer, has offered the deal to poach star bond trader Antonio Polverino from Merrill Lynch, according to The Times.

The reported move is set to further fuel concerns over the return of mega City pay packages, just a day after the Financial Services Authority was accused of watering down its bonus crackdown.

RBS only last week announced the appointment of new finance director Bruce van Saun, who joins next month from Bank of New York Mellon, where he is said to have earned 9 million US dollars (5.4 million).

The majority State-owned bank is also under fire over a multi-million pound project to fit out Central London offices for thousands of staff.

RBS has so far taken 20 billion of taxpayer cash and is preparing to offload billions of pounds worth of assets turned sour into the Government's toxic asset insurance scheme after buckling amid the credit crunch.

It last week reported bad debt charges of 7.5 billion in the first six months of the year and, despite narrowly scraping out the red with pre-tax profits of 15 million, warned that its recovery was still several years away.

Today's reports of the bank's spending spree on new hires and offices comes at a delicate time, with the taxpayer still sitting on a substantial paper loss on its stake.

But RBS is keen to attract new talent to help rebuild the bank, which it said will ultimately benefit the taxpayer.

The group declined to confirm the pay packages of Mr Polverino or Mr Van

Saun, although chief executive Stephen Hester said last week on announcing the finance director's appointment that he would be on slightly less than his predecessor, who was last year paid a basic salary of 829,000.

RBS also claims to impose strict "no payment for failure" clauses on pay packages, such as deferring payment and allowing potential future clawback of bonus payments.

It has recently confirmed agreeing to guarantee bonuses to certain key individuals – a move frowned upon following the financial meltdown.

RBS said: "While guarantees are not our preference, we reserve the right to use the tools we need to attract and retain the best.

"Our core reward principles that there are no rewards for failure and that our approach on deferral and clawback protect the long term interests of shareholders."

The bank also claims its expensive Central London office re-fit was commissioned in 2007, before the worst of the financial crisis hit and will consolidate staff from a number of offices under one roof.

"We have completely exited from four buildings throughout the city as part of the move to Bankside and we have made considerable cost savings as a result," it added.