Royal Bank of Scotland could be poised to release potentially lucrative bonuses to a handful of top bankers from a share-based scheme put in place three years ago.
The rewards are due to be handed to five members of Stephen Hester's management team on Tuesday – the same day as the bailed out bank's annual shareholders' meeting in Edinburgh.
The size of the payments to the five – including the head of risk, Nathan Bostock, whose promotion to finance director was announced last week – will not be known for a number of days and will depend on the bank's share price and whether the performance criteria attached to the shares had been achieved.
Theoretically, the payouts could amount to more than £5m if all the performance targets are achieved, although it seems unlikely they will pay out in full.
Hester, the chief executive, stood to receive shares worth £2.5m – although he appears not to have hit the share price and financial performance targets attached to his potential rewards.
According to a stock exchange announcement issued in 2010 when the shares were awarded to the RBS bankers, they are due to "vest" on 14 May although the bank will not need to announce the release of any shares yet.
Hester, who has said that the bank will be ready for privatisation next year, announced more management changes on Monday with the recruitment of Simon McNamara from Standard Chartered to the position of chief administrative officer. He will replace Ron Teerlink whose intention to leave was announced last year. McNamara's role involves oversight of IT, something that has dogged the bank since the computer meltdown last June when customers were unable to access their accounts for days.
The bankers who could cash in under the bonus scheme include Ellen Alemany, whose retirement from the helm of the US operation citizens was announced last week. The highest paid banker at RBS after receiving £4.8m last year, she stands to receive up to £1.8m from the three-year scheme. If all the performance targets are attained Bostock could receive £1m, insurance head Paul Geddes £700,000, head of the business bank Chris Sullivan £800,000 and Teerlink £900,000 Bostock is replacing Bruce van Saun who is moving back to his native US to run Citizens and prepare the operation for a partial stock market flotation.
The RBS annual meeting is taking place amid speculation about the government's plans for its share stake which could be sold off in a "Tell Sid" style offering to the public or through a free share handout proposed by some Liberal Democrats.
However the banking standards commission, chaired by conservative MP Andrew Tyrie, is due to publish the findings of its nine-month review into the culture of banking next month and could recommend a breakup of RBS into a good and bad bank.
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