In an attempt to appease ministers, RBS has indicated that no individual banker will receive a bonus with a cash element of more than £25,000 under its plans.
The remainder of the bonuses, to be paid next month, will be in RBS shares, with a large proportion of them deferred or not paid at all if an employee leaves RBS within an agreed period, or if their area of the bank makes significant losses in the following two years.
The bank has decided it will not pay any bonuses to employees who work in loss-making areas of the business. UKFI, which is led by John Kingman, a senior Treasury official, is considering the proposals.
About half of the bank’s “bonus pool” will consist of payments that RBS believes it is contractually obliged to pay. Much of this sum will be paid to employees of ABN Amro, the Dutch banking group for which RBS is now acknowledged to have overpaid at the height of the banking boom. The proposed remaining bonus pool, worth about £500 million, is discretionary.
08 February 2009
Bankers wonder why the rest of us are annoyed
Do you feel appeased? The Sunday Telegraph spells it out: