RBS Ditches Double-Salary Bonuses For Bankers
Taxpayer-backed Royal Bank of Scotland has ditched a proposal to give bankers bonuses of up to twice their salaries.
The bank had wanted to give workers lucrative and competitive bonuses, despite making a pre-tax loss of £8.2bn in 2013.
British taxpayers own 81% of the bank, which received the biggest bailout in history following the financial crisis.
UK Financial Investments, which manages the Government's stake, said it would not support the proposal.
As a result, RBS said a planned vote at the bank's annual general meeting (AGM) in June would not take place.
The Treasury rebuked the bonus plan and said "an increase to the bonus cap cannot be justified and the Government made clear it would not have supported such a proposal".
Last year the European Parliament agreed to cap bonuses for bankers at their fixed annual salary, or twice that sum if shareholders approve.
Mindful of London's importance in world finance, the Government remains opposed to the EU 2:1 bonus-to-salary cap.
A Treasury spokesman said: "The European bonus cap is not a well-thought out idea and will not support stronger and safer banks, which is why the Government is challenging it in the European Court.
"But while it exists, we will make sure it is applied fairly.
"Under the new strategy set out by RBS chief executive Ross McEwan, RBS is heading in the right direction, but it has not yet completed its restructuring and remains a majority publicly-owned bank."
RBS also said Mr McEwan and chief financial officer Nathan Bostock would not receive bonuses from 2014.
But it said they would still receive share-based "long-term incentive awards" that vest in five years.
The RBS bonus block comes just a day after a heated Barclays AGM saw jeering from shareholders and a partial rejection - reaching 24% of votes - of its remuneration proposals.
And on Friday, 38.5% of pharmaceutical firm AstraZeneca shareholders rejected a lucrative management remuneration plan.