Financial News
- 23 February 2012, 3:01
State-Owned RBS to Pay Out £785m In Bonuses
Royal Bank of Scotland (RBS) is to pay out just under £800m in bonuses to its employees for their work in 2011 - including £390m set aside for its investment banking staff, according to Sky sources.
The bonus pool, revealed exclusively by Sky News City editor Mark Kleinman, is likely to further stoke recent controversy over banker pay.
Earlier Kleinman reported that the state-owned bank would award its investment bankers bonuses of just under £400m for 2011.
The day before RBS announces its full-year results, the bank is understood to have agreed with the Government that it can pay out between £390m and £400m in bonuses this year.
The pot represents a cut of about 60% on last year's investment bank bonuses at RBS, which is 82% owned by the taxpayer.
Kleinman has now also revealed that hundreds of millions of pounds in bonuses will also be paid to employees outside its investment banking arm.
It comes as the bank prepares to report an expected full-year loss of up to £2bn, making the prospect of the taxpayer breaking even on the £45bn investment made in RBS during the 2008 banking crisis as remote as ever.
The rewards follow a year in which thousands of employees were made redundant as Stephen Hester, the bank's chief executive, accelerated a restructuring of the business.
Despite the reduction in the overall bonus pot, scores of RBS bankers are expected to collect packages worth more than £1m.
The biggest payouts will be largely paid in shares and deferred over a three-year period.
Ministers have insisted that RBS enforces a £2,000 cap on the cash element of bonuses for the third successive year.
Angela Knight, chief executive of the British Bankers Association, defended the latest RBS payouts, saying bonuses for investment bankers were set according to the international market.
She told Sky News that if UK banks failed to compete with global compensation levels they would lose the best employees, and in the case of RBS this could damage the long-term interest for the taxpayer.
The bonus revelation came as Sir Philip Hampton, RBS's chairman, claims in a Sky News documentary with Jeff Randall, that the era of big banking bonuses is over.
A YouGov poll for Sky News also showed that three-quarters of people believe that bosses at Britain's state-backed banks should not receive a bonus.
Mr Hester waived his £1m bonus several weeks ago, while Antonio Horta-Osorio, chief executive of Lloyds Banking Group, also decided to rule out receiving a bonus.
The 2011 pool is the lowest awarded to RBS's investment bankers since the bank was rescued by taxpayers in 2008.
what do you think?
Craig Hudson
disgusting
Gordon Wright
There should be no bonuses at all until all of the taxpayer's money has been paid back !!!
fishlock911
Always thought a bonus was for good results not poor performance maybe I've got it all wrong!!!! just might have to change my bank
Lee Bennett
Another camerloon broken promise.We meant no bonuses for failing banks .Cameron thought it meant bonuses for one person .How can you pay any bonuses till all the bail out money has been paid back ? So just how are the going to pay it back ,when they have LOST another 2 billion quid .If they are not going to pay it back then every taxpayer in the country should get an equal ammount of shares,This is an absolute disgrace
Neil Elmes
If you have someone who can make £10m profit for the Bank then surely it makes total sense to pay him a £1m bonus. What would you prefer, that he went to another Bank and made the profit for them. The fact that because of other problems the Bank makes a loss is irrelevant. If you can't atract people like him the losses will be bigger, and as a taxpayer and part owner of RBS I want them to reduce the losses as much as they can. Otherwise it is costing me and the rest of the public more money.
Ray Stoner
Employees and this includes the very top people, are paid a salary for doing their jobs. There should be no such thing as bonuses and for making a huge loss, they shouldn't be paid at all.
Petulant Child Cameron
Neil Elmes, that is a pathetic argument when you consider the supposed experts who were in charge of the bank before it fell. If these people want to leave and work for other banks in the UK or elsewhere let them! RBS have not made an actual profit, they have improved the bottom line by making staff redundant, so why should they get any bonus?
Neil Elmes
If you ran a business that was loosing £2m a year, and you could find someone who could make you £1m a year, but wanted a basic salary plus 10% of his profit, would you employ him? The businesss would still be loosing £1m a year, but would obviously be better off by employing him, even though he gets a bonus from a loss making company. That's exactly what's happening on a larger scale with RBS. What's pathetic about that
SamThompson312
the point is MOST businesses wouldnt survive if they were making a loss of 2mill pa never mind 2 billion!! MOST companies only pay bonuses when they make a profit above a set amount, thats why everything is pathetic about this story!!
stuart walmsley
This is psychedelic accounting at its best. Bail out a business with public money, continue to lose money and then pay out extravagant bonuses in the teeth of public opinion. I am sure there is a lot going on that we the public don't know about and will never get to know because of criminal profiteering and a complicit government. A scenario that is now global. Democracy..ha !
Petulant Child Cameron
Cameron is a liar! He said he was going to get these Bankers to act more responsibly, then whilst he's off trying to tell our footballers how to behave on the pitch, or to hang his tie between Sarcozi's legs he thinks we won't have noticed that RBS are at their game of rewarding their staff for another year of poor performance! Cameron, get van and go over to RBS and relieve them of that £400 million, give it to the more deserving of the UK i.e. the people you're suppose to be representing in this country not your tory barrow boy mates!!!!!!!!!!!!!!!!!!!!
Gillian Stafford
This lot must have some laundry bill because they have spent the last 2 years wetting themselves with laughter at all of us !
John Henderson
These are Cameron's friends - of course they should have a good bonus. Look on the bright side - what might they be getting if the Bank had actually made a profit ! Mind you, knowing bankers as we all do, they may just decide not to accept it ! Oh look, there's a pig flying past my window.
Adrian Wagstaff
Wow! That must calculate to £2 for every person in Great Britain. It's like being Texas and striking oil.
David Mear
what a bliddy cheek lose us all our money, use their clout to get Camerotten and his Muppet puppet Geo Os-borntocheat, to make our lives a damn sight worse and then they pay them £400,000,000,OMG how bad can this lot get?
tonysallisfsmai
Why don't the required amount of people(I think it's 100,000) sign an on-line petition at No.10, then it would have to be debated in Parliament
dean bristow
where is my bonus ?
James Tait
Once again the Ordinary Great British Public are at the mercy of corrupt Banks and their Buddies the corrupt politicians.
Princess Angelique
12:37pm on 22/2/2012
Hang on! A loss of up to £2bn and paying out bonuses?? Makes no sense at all!!!