‘Goodwin man’ John Hourican faces fight for £4m bonus
John Hourican is under growing pressure to forgo his windfall bonus
JOHN Hourican – a senior executive from Sir Fred Goodwin’s era at Royal Bank of Scotland – is under growing pressure to forgo a windfall of up to £4.4 million, amid mounting calls for the UK government to introduce a “bonus tax” on payouts handed to financial workers.
The latest demands come after chief executive Stephen Hester caved in to calls to waive his near-£1m windfall from the taxpayer-controlled bank, following in the footsteps of the bank’s chairman, Sir Philip Hampton, who made a similar move last week.
RBS is due to announce details of other executive bonus payouts within a month – including an expected £4.4m share hand-out to Mr Hourican, the investment banking chief who has overseen a restructuring that will include about 3,500 job losses, and a £600,500 share reward for group finance director Bruce van Saun.
Mr Hourican was appointed chief executive of RBS’s investment arm, GBM, where he was previously chief operating officer, in October 2008 as Sir Fred was being forced to leave the institution.
Reports yesterday claimed that Mr Hourican believed he had met all the targets associated with the bonus scheme and would find any attempt by the board to claw back his payout “pretty offensive”.His total pay packet for 2010 was £6.3m, including a share bonus of £2.5m.
Mr Hester’s decision late on Sunday to waive his award of £963,000 in shares came just hours after Labour announced its plans for an Opposition Day debate to force a vote on his payout.
But, despite government insistence that it will not “micro-manage” the government-controlled banks, the opposition will instead ask coalition MPs to support them in imposing a bonus tax that would apply to all banking executives – and which would raise £2 billion.
“This is not about individuals now, it’s about getting a bonus tax supported,” said a spokesman for Labour leader Ed Miliband.
But Ian Murray, Edinburgh South MP and shadow minister for business, said the party was looking to target executive bonuses at RBS and other banks.
He said: “When MPs are, as I was last weekend, dealing with constituents who can’t even pay their tax bill, it is shocking that individuals such as John Hourican are in line to receive awards of more than £4 million..”
A Downing Street spokeswoman said: “What we are not going to be doing is micro-managing. This government has taken action to ensure that bonuses are responsible, they are much lower.”
It was “a matter for individuals” whether they chose to accept any bonus they were offered, she added.
Mr Hester’s bonus was less than half the amount he was paid last year under the bank’s remuneration scheme following government reforms of the bank’s bonus system, including a cap on cash bonuses of £2,000.
However, campaigners yesterday called on Mr Hourican and Mr van Saun to give up their own payouts from the Edinburgh-based institution, which is 83 per cent owned by the taxpayer.
“There remains a long way for RBS to go in proving its credentials as a responsible organisation, to its customers and also to its thousands of staff,” said David Fleming, national officer for union Unite.
He added: “All the banking bosses should take a long hard look in the mirror before they tap themselves on the back and accept the massive rewards. Many of their employees continue to be overworked and low-paid.”
Simon Chouffet, spokesman for the Robin Hood Tax campaign – a group of charities, trade unions and economists opposed to large bonus payouts in the financial sector, said: “Hester’s bonus is just the tip of the iceberg, if you think that last year at RBS alone, there were 323 people who received more than £1m in total salary payouts.”
Liberal Democrat peer Lord Oakeshott took to Twitter to call for further action against a wider range of RBS high-earners.
“Now we must crack down on bonuses for 323 RBS fat-cats who collected 1.1m each on average last year – the biggest supporting cast since Ben Hur,” he wrote.
The exact number of RBS staff who are “code staff” – ie have to have their salaries disclosed under Financial Services Authority regulations governing those who are “a material impact on the risk profile of the institution” – for 2011 will not be revealed until the time of the bank’s results at the end of next month, although it is thought likely that it will be lower than the 323 figure of last year.
The bank is believed to have brought the announcement about Mr Hester’s bonus forward due to media speculation.
“Hester’s bonus came out early because of speculation,” said a senior source. “It was considered prudent to just get the figure out there ahead of the official announcement.”
Mr Hester, who took on the top role at RBS three years ago, was given a brief to restructure the bank and restore its fortunes – resulting in 30,000 fewer jobs.
“It would have been fascinating to have been a fly on the wall in the planning of the original RBS bonus news, and I guess there were some interesting conversations between the management and the comms team about the timing and content of the announcement,” added Jim Donaldson, executive vice-president, of corporate communications at public relations firm Weber Shandwick.
The bank will disclose the exact payouts to be handed to Mr van Soun and Mr Hourican – and whether they will take them – before the company’s results are published on 23 February.
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Comments
There are 53 comments to this article
Page 1 of 4
DannyMullins
Thursday, February 2, 2012 at 05:37 AMThis attitude to money is more than "pretty offensive", it's REVOLTING.
occupylink
Wednesday, February 1, 2012 at 05:59 PM#46 'fat cats' 'corporate lunches' 'no social conscience' 'gamblers' 'leeches" You said it. I call them degenerate and brutal parasites. Bonuses should be awarded to workers who do a good job. Executives should not get any bonus.
occupylink
Wednesday, February 1, 2012 at 05:24 PMI notice any posts I make now are being censored? Hourican does not deserve his bonus. The Scotsman has applauded these banking executives. Why does it not criticise Ellen Alemany, who is getting the biggest bonus from RBS?
occupylink
Wednesday, February 1, 2012 at 05:17 PMPathetic that the Scotsman continues to applaud people like Hourican while vilifying the Occupy Movement. Journalists in your paper have a lot to answer for. I notice that you are not going after the top paid RBS execs like Alemany.
Jacqueline Hyde
Wednesday, February 1, 2012 at 10:56 AMLike Goodwin and most of the other corporate spivs who clearly appear to be milking the UK banking system for their own personal gains, Hourican is an accountant and not a banker (except, of course, in the rhyming slang sense of the word!). What is so special about modern-day banks that they cannot be run by people who have come up through the corporate ranks?
ItsTime
Wednesday, February 1, 2012 at 08:54 AM#46 what targets dios he meet? not to spill soup on his shirt? Or to keep the share price at about half the government puchase point. Please stop making me laugh he is getting money for old rope. The share price will improve with general economic conditions and have very little to do with what any sane CEO would also be doing.
Chappit Tatties
Wednesday, February 1, 2012 at 08:19 AMI am just looking at a recruitment advert for "Auditor General for Scotland" - arguably the most important financial post in the country. The salary is 140,000 pounds per annum. Why does the Board of RBS (and the trustees of the shareholder's money) think that John Hourican is worth a bonus of 28.5 times the salary of the Auditor General for Scotland?
number withheld
Tuesday, January 31, 2012 at 10:13 PM'fat cats' 'corporate lunches' 'no social conscience' 'gamblers' 'leeches' anymore sweeping generalisations out there??? stephen hester negotiated a bonus as part of a package when he took the job based on targets, did he not? if he met the targets he gets his bonus. simples. phil c - do you think pop stars, footballers and film stars deserve their salaries??
Simonsaid
Tuesday, January 31, 2012 at 09:20 PMTime the government opened the book on this nest of self-serving thieves. how many more million plus bonus execs are there lurking in the RBS board room. This latest unknown is on 4 million plus bonus - what is his salary - looks like by the time they count up al the top exec salaries and bonuses they might get little change out of a billion
Letters from Muscat
Tuesday, January 31, 2012 at 06:06 PMSo Sir Fred no more......RBS failure, triggered the worst recession in 60 years. What about some of the other culprits in the banking industry? Was he the only one?
Phil C
Tuesday, January 31, 2012 at 05:12 PMThese leeches are not pop stars, they're not footballers, they're not film stars. They're frigging bankers!! They shift money around and get overpaid for it without these distasteful, morally bankrupt 'bonuses'. You try to get help from them as a small or struggling business.....The help they give is how much their bonus should be, a big fat ZERO!
Kinghob
Tuesday, January 31, 2012 at 03:40 PMThe westminster governments under labour bailed out the banks with taxpayers money but promised bonuses would be dealt with in a more fitting manner and now westminster tory libdem who promised the same are using the media to bore us to death over bonuses because westminster says one thing but does another for the rich which is why michelle mone thinks she can tell them what to do.
saltpeter
Tuesday, January 31, 2012 at 03:19 PMthey are very well paid for doing their jobs. they do not need bonuses unfortunately there are far to many greedy sods among them with absolutely no SOCIAL CONSCIENCE WHATEVER what thatcher sewed is flowering well
scouser
Tuesday, January 31, 2012 at 03:13 PMwhen the labour government bailed rbs out, gordon brown and alistair darling should had inserted a claus in the contract, it should have that stated no one working in rbs will receieve any type of reward or bonus apart from their salary until the money they borrowed is paid back in full and with interest, they gace the bank billions in tax payers money yet failed to ensure it would not be wasted, margaret thatcher when she was in office had a 80% tax rate that was placed on bank bonuses of this amount, therefore todays government should follow her lead and introduce the 80% tax rate, i would also like to add while everyone is down on the bankers and rightly so, why have they allowed m.p's to get away with the billions they wasted on useless hair brain projects, there was billions wasted on computers installed in our nhs hospitals that never worked, the government was told it was a total and useless acheme that would not work, then we have john prescotts bike and bus lanes and speed bumps that cost close to £40,000 for each one to be laid, we have bike lanes some that are 2 meters long and go nowhere, we have billions wasted on the building of two new navy ships that will never be used, it's time for the tax paying people of this country to not only hold the bankers to task but also our politicians who think nothing of wasting our money on their useless follies
Finlay
Tuesday, January 31, 2012 at 02:32 PMIt will not be long before the folks on the street (and the few still working) will decide that they have had enough of this. The banks and the politicians have had their chance to fix it and failed due to their own selfish interests. Talk about an Arab Spring, a System Sanity Spring in the financial sector is only a few weeks away.
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