Royal Bank of Scotland – the bailed-out bank which recently reported its eighth consecutive year of annual losses – has handed its top management team future bonuses in shares worth £17.4m.
The bank, 73% owned by the taxpayer, also released bonuses already earned worth more than £5m to the top management team, including the chief executive, Ross McEwan, who took the helm in October 2013.
The £17.4m of share awards were announced to the stock market less than a fortnight after RBS reported a £2bn loss for 2015 – taking the total losses to more than £50bn since its 2008 bailout when taxpayers pumped £45bn into the bank.
McEwan, who was promoted from running the retail arm of RBS to replace Stephen Hester, has attempted to defuse rows over pay by ending the practice of handing annual bonuses to his top management team.
Even so, members of the team are still receiving bonuses handed out in previous years and being awarded shares through three-year performance plans. The £17.4m of shares awarded to McEwan and his 10-strong management team are based on performance over three years and will not be released until 2020 and 2021, when the executives will find out if they are paid in full.
McEwan, who was paid £3.8m in 2015, was handed shares worth £2.6m as part of this long-term share plan.
The London Stock Exchange announcement shows that two executives – Mark Bailie and Chris Marks – each received almost £1m of shares through annual bonuses handed to them in previous years when they worked in the investment banking arm of RBS. They were both awarded £2m of shares under the long-term bonus plan.
Shares in RBS are trading at 229p, well below the 502p at which taxpayers break even on their stake and below the 330p at which George Osborne sold off the first tranche in August at a £1bn loss.
Campaigners for a tax on financial services at the Robin Hood Tax campaign compared the RBS bonuses with the 1% pay rise for NHS workers.
“Once again different rules seem to apply to the banking sector who, eight years on, have yet to pay the price for their part in the financial crisis. The government must step up and stop this special treatment for the City,” David Hillman, spokesman for the Robin Hood Tax campaign said.
RBS notified the stock market of the share awards on Tuesday just 10 minutes after rival bailed-out bank Lloyds Banking Group confirmed the scale of payouts to its management team. Lloyds, in which taxpayers continue to have a stake of just under 10%, revealed last month that its chief executive, António Horta-Osório, and his 10 top managers were receiving awards of shares worth £20m.
The chancellor wants to sell off much of the remaining stake in Lloyds to the public but was forced to postpone the sale because of the slump in shares during January’s stock-market rout. However, the shares have recovered some of their losses but are trading at about 71p – still below the 73.6p at which taxpayers break even.
In Lloyds’ annual report it said there could be market volatility before and after the EU referendum on 23 June.
This article was written by Jill Treanor City editor, for theguardian.com on Tuesday 8th March 2016 16.41 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010