Freewheeling Sir Jackie's pay cut helps RBS on the road to recovery

Published on Friday 6 March 2009 21:02

MOTOR-RACING legend Sir Jackie Stewart, one of Royal Bank of Scotland's "sporting ambassadors", yesterday agreed to take a pay cut to help the troubled bank.

The Scot, one of the most high-profile figures paid to raise awareness of the bank's commitment to sport, will work out the remaining three years of his contract for the price of just two.

The bank announced that Sir Jackie, who is thought to have earned more than 4 million promoting the bank since clinching a lucrative deal in 2004, has agreed to work for RBS for free this year.

His move has been announced just weeks after it emerged that RBS was ending its multi-million-pound sponsorship deal with the Williams F1 racing team in 2010.

Politicians have been demanding that RBS cuts back on major sponsorship deals in the wake of its 20 billion bail-out from the taxpayer.

Among the other sporting stars who have deals lasting a number of years are the Queen's grand-daughter Zara Phillips, who is a leading equestrian performer, tennis ace Andy Murray and his brother Jamie, and golfing legend Jack Nicklaus.

Andy Murray said recently that he was prepared to renegotiate his contract with RBS, which has backed him since he was 13, because of the current financial climate.

Earlier this year Sir Jackie, a three-times world champion, had expressed a reluctance to renegotiate his contract with the bank.

However a statement from the bank revealed: "Sir Jackie has offered to fulfil his contractual obligations in 2009 without payment, which RBS is very pleased to accept.

"In recognition of the changed financial and economic circumstances facing RBS, Sir Jackie Stewart has been in discussion with the group over a period of weeks about the remaining terms of his contract.

"Sir Jackie wants to help the bank with its new strategic objective of rebuilding standalone strength by serving its customers well, in the UK and globally, in the next three years."

New RBS chief executive Stephen Hester told The Scotsman in January that he had ordered a review of all of the company's sponsorship activity.

RBS aims to slash sponsorship costs by 25 per cent this year and by around 50 per cent in 2010.

Within weeks it emerged RBS had decided to end its contract with the Williams F1 team, which dated back to 2005 and was renewed in 2007.

Despite its troubles, RBS was able in January to confirm a new 20 million four-year deal to sponsor rugby's flagship Six Nations tournament, extending the bank's involvement until 2013.

However last month MP John Mann, a member of the Treasury select committee, led calls for RBS's "ambassadors" to volunteer to opt out of their contracts because the bank was 68 per cent owned by the taxpayer.

Although RBS refuses to divulge details of the deals it has struck with sports stars, Ms Phillips' contract is thought to be worth some 6 million over three years.

Andrew McLaughlin, head of communications at RBS, added: "This is a tremendous gesture by Sir Jackie.

"He has worked tirelessly and with great success for the group over a number of years.

"His commitment and loyalty at such a challenging time in the company's long history is greatly appreciated by everyone at RBS.

"Having his energy and talent focused on our customers, charity partners and communities in the coming period will be our shared priority."

It is understood RBS is holding talks with all of its sporting ambassadors, who also include golfers Luke Donald and Paula Creamer, and Indian cricketing superstar Sachin Tendulkar.

An insider said it was expected that talks would continue over the next few months and that some stars were proving "more reluctant than others" to take a pay cut.

A spokeswoman for RBS added: "We are seeking to reduce costs across all our sports sponsorship activity and are making good progress. We recognise we are working in a very different operating environment than when the advertising campaigns were launched and are working hard to reduce the associated costs.

"Our strategic review has identified all our core and non-core activities and we are reassessing all our marketing activities to align it with the ongoing core businesses that they will continue to support."

SPONSORSHIP DEALS UNDER FIRE

SPECULATION over the future of RBS sponsorship deals has been rife ever since the bank had to be bailed out by the government in September.

In the firing line have been its long list of sporting "ambassadors", with MPs accusing the bank of going on a "reckless" spending spree when it signed up the likes of Zara Phillips and Andy Murray. Phillips is thought to have signed a three-year deal in 2007 worth 6 million.

Andy Murray has a similar agreement, although last month he said he was willing to try to "help" RBS by reopening talks on his contract. He said: "I will speak to the people at RBS about the best way forward and we will work something out."