Royal Bank of Scotland Group (RBS), the UK’s biggest government-controlled bank, is paying nine executives a total of £10 million in share-based bonuses as it seeks to retain “high-performing” staff.
John Hourican, head of RBS’s investment banking unit, was awarded about £5.9 million in stock, which is deferred in stages through January 2013 and “subject to clawback,” the Edinburgh-based bank said in a statement on March 5th.
RBS chief executive Stephen Hester, who waived his bonus last month, has said the payments are essential to keep employees, and return the bank that is 84 per cent state-owned back to profit. The lender has overhauled management after receiving £45.5 billion of taxpayers’ money following record losses in 2008.
“The board believes that the prospects of recovery are heavily dependent on having remuneration policies which are fundamentally reformed in structure but ensure that high- performing staff are not disadvantaged by working at RBS,” the bank said.
Ellen Alemany, head of US operations, received the second-highest award, valued at about £1.4 million, while Finance Director Bruce Van Saun was paid £362,500 in shares, the statement showed.
The share awards must be retained for as long as five years “to ensure that staff and shareholder interests are aligned,” according to RBS. The Financial Times reported the bonus payments earlier.
RBS will pay £1.3 billion in bonuses for 2009, compared with about £900 million a year earlier, two people briefed on the discussions said last month.
Bloomberg