RBS Cuts CEO's Potential Share Award 40% After Ninth Annual LossBy
McEwan earned 3.5 million pounds last year, little changed
Bank’s million-euro earners fall to 87 from 101 in 2015
Royal Bank of Scotland Group Plc cut Ross McEwan’s potential share award this year by about 40 percent after the bank made its ninth consecutive annual loss. The overall bonus pool for 2016 shrank by 8 percent to 343 million pounds ($430 million).
McEwan could receive a maximum of 1.75 million pounds in deferred shares this year, down from 2.87 million pounds in 2016, according to the Edinburgh-based lender’s annual report published Friday. He was paid a total of 3.5 million pounds last year, little changed from the year before, as he missed targets in his long-term incentive program, including for shareholder returns, customer trust and employee engagement.
The number of employees earning at least 1 million euros ($1.1 million) fell to 87 last year from 101 in 2015, the report showed. One employee earned at least 5 million euros and three received than 4 million euros.
RBS reported a deeper loss of 7 billion pounds last year and warned it was heading for a decade without profitability after the bank booked exceptional items such as misconduct and restructuring costs. The bank abandoned a sale of a group of branches known as Williams & Glyn and still needs to settle a U.S. investigation into the sale of mortgage-backed securities.
“While RBS continues to report losses it is vital that the bank remains disciplined in its approach to remuneration,” the board’s pay chief, Sandy Crombie, said in the statement. “On the other hand, we need to fairly reward our colleagues who work with customers from day to day and who bear no responsibility for the decisions which led to those losses, and it is important we attract and retain well-qualified and motivated people.”
Under a new policy, McEwan must hold 400 percent of salary in RBS stock, up from 250 percent. Executives aren’t eligible for annual bonuses.
The bank, which is still majority-owned by the government after receiving a 45.5 billion-pound bailout during the financial crisis, dropped 2 percent in London trading.