Royal Bank of Scotland today said opposition from the UK government has forced it to scrap plans to pay bankers bonuses worth up to double their annual salary.
The lender, which is just over 80 per cent owned by the taxpayer, said UK Financial Investments – the body that manages the state’s stake – would not have supported the move, which was due to be put to shareholders at RBS’s upcoming annual meeting.
Under new European rules, the part-nationalised bank requires the approval of investors to award variable remuneration up to 200 per cent of fixed pay.
Today’s decision follows the publication of the bank’s annual report, in which Penny Hughes, chair of its remuneration committee, said RBS was considering whether to ask shareholders to approve maximum bonuses worth two times annual pay.
Hughes said: “The board will agree its final position in light of emerging market practice and details of any proposals will be contained in the letter to shareholders prior to the AGM.”