RBS slammed after 10 executives share £3.5m bonus

POLITICIANS were last night angered after it emerged that the Royal Bank of Scotland has awarded shares worth £3.5 million to ten senior executives.

RBS group chief executive Ross McEwan has waived his 2014 bonus for 18 months Picture: Getty

The awards handed out by the taxpayer-funded institution led to claims that RBS had failed to learn the lessons of the financial crisis, which saw public outrage over the massive packages paid by failing banks.

The largest pay-out announced yesterday was £530,000 to the bank’s restructuring chief Rory Cullinan.

Documents filed to financial regulators revealed that Ewen Stevenson, who joined as group finance director in May, received a share award worth £225,000.

The shares-based payments were given in the form of new “role-based awards”, which take into account a European Commission cap on annual banking bonuses.

The executives, all bar one under boardroom level at RBS, received the shares yesterday, awarded for the eight months to the end of August. They can cash in 20 per cent of them each year for the next five years.

Mr Cullinan’s award was the equivalent to 100 per cent of his salary for the eight-month period to the end of this month.

The EC’s new caps on bonuses state that from early 2015, bankers’ bonuses can be no higher than their fixed basic salary, or twice that level if voted through by shareholders at AGMs.

UK Financial Investments (UKFI), the quasi-government quango which manages the taxpayers’ stakes in bailed-out banks, blocked RBS from paying out that higher amount.

Last night, an SNP spokesman said: “The public will struggle to understand why bonuses are being paid at all to executives in a bank which is still losing money and is 82 per cent owned by the taxpayer.

“Not withstanding that these bonuses were paid in shares, it is still incumbent on the bank to say why they are necessary at all.”

Labour finance spokesman Iain Gray suggested that banks and bankers had “still not learned any lessons”.

Mr Gray said: “We need a government prepared to be tougher on bonuses, and reintroducing the tax on bankers’ bonuses as Labour has pledged to do would be a good start.”

RBS said yesterday that a commitment to no longer pay out annual bonuses to executive directors had been extended to other top managers.

The bank’s group chief executive, Ross McEwan, waived his 2014 bonus for 18 months when he succeeded Stephen Hester at the helm last autumn.

He said at the time he wanted to avoid political controversy at the 81 per cent taxpayer-owned bank in order to concentrate on making RBS a stronger and simpler bank after its £45.5 billion taxpayer bailout in 2008.

The UKFI allowed Lloyds, now 24 per cent owned by the state, to pay out the higher level of double a fixed basic salary given it is widely seen as far further along the road to recovery than RBS.

The politicians’ concerns were not shared by those in the City.

A source close to RBS said: “These pay awards are being deferred over a longer period to align them more with shareholder value.”

The bank flagged up that it would introduce the so-called role-based pay awards last spring at its AGM.

There is expected to be little shareholder opposition to the plans. One City fund manager said: “I don’t think there will be much shareholder disquiet.

“It is not in shareholders’ interest for them to be uncompetitive on pay, and they are not breaking any rules.”

Senior managers who received the following number of shares in bonuses

Rory Cullinan 154,241

Ewen Stevenson 65,553

Elaine Arden 55,431

Leslie Matheson 106,041

Simon McNamara 115,681

Jonathan Pain 57,841

Alison Rose 115,681

David Stephen 115,681

Christopher Sullivan134,961

Donald Workman 96,401