ROYAL Bank of Scotland investment banking boss John Hourican pocketed £4.7 million yesterday as he exercised lucrative share options in the bank – after helping push through thousands of redundancies in the division last year.
His jackpot was linked to short-term bonuses and longer-term incentive plans, an RBS spokesman confirmed.
It came on the same day that Toby Strauss – insurance chief at Lloyds Banking Group, also part-taxpayer owned – sold 1.2 million shares worth more than £380,000. These were largely granted to Strauss to buy him out of stock options at his previous employer, insurance group Aviva, and he sold his shares at an average price of 32p.
Hourican’s sale of 17.6 million shares after exercising share options, at an average price of about 27p, comes after RBS’s global banking and markets division has made some 5,000 people redundant. This has been with the encouragement of the UK government as RBS has scaled back its investment banking activities to focus on UK lending. Recently, it emerged that Hourican received a total pay and awards package, including bonuses, of about £7.5m last year.
The boardroom share sales come as the taxpayer sits on total losses of about £30 billion on the public bailout of RBS and Lloyds/HBOS at the time of the 2008 financial crash. That rescue has left the state owning 82 per cent of RBS and 41 per cent of Lloyds.
The RBS spokesman said Hourican’s rewards for his work between 2009 and 2011 came as the global banking and markets (GBM) division generated profits of £10.7bn in the period – over a third of the bank’s total underlying earnings.
Earlier this year, RBS chief executive Stephen Hester and chairman Sir Philip Hampton gave up their bonuses after a political and public outcry over the planned payments.