RBS Said to Cut Investment Banking Bonus Pool by More Than 50%
Royal Bank of Scotland Group Plc, Britain’s second-biggest government-owned lender, will cut bonuses for investment bankers by more than half, a person familiar with the matter said.
RBS (RBS) will set aside about 400 million pounds ($623 million) for bonuses at its securities unit for last year, compared with about 950 million pounds in 2010, said the person, who declined to be identified because the details are not public. Britain’s Prime Minister David Cameron said last month that individual discretionary cash payments at state-controlled RBS and Lloyds Banking Group Plc (LLOY) would be limited to 2,000 pounds.
RBS Chief Executive Officer Stephen Hester, 51, said last month he would waive his 963,000-pound bonus for 2011 after the U.K.’s opposition Labour Party sought a Parliamentary vote on the award. Chairman Philip Hampton waived his 1.4 million-pound stock award, and the British government is pressing for other board members also decide to forgo their bonuses, a person familiar with ministers’ thinking said last month. RBS reports full-year earnings tomorrow.
The government was forced to rescue RBS at the height of the financial crisis, injecting 45.5 billion pounds of taxpayer money into the lender, making it the costliest bailout of any bank in the world. Hester said in an e-mail sent to staff this month that the cost of cleaning up the 82 percent government- owned bank, inherited from former CEO Fred Goodwin, totals 38 billion pounds so far. Hester has cut the Edinburgh-based lender’s assets by about 600 billion pounds to 1.6 trillion pounds since replacing Goodwin in 2008.
Sky News reported the bonus payment earlier.
To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net
To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net
Rate this Page