Thursday 16 January 2014

David Cameron allows RBS to give staff shares worth more than DOUBLE their salaries as bonuses

The Prime Minister said he would veto any attempt by RBS to increase its overall pay and bonus bill but did not say the Government would reject individual awards
David Cameron has given the green light to the Royal Bank of Scotland to hand staff shares worth more than double their salaries as bonuses.
The PM said he would veto any attempt by RBS to increase its overall pay and bonus bill but did not say the Government would reject individual pay awards.
As RBS is cutting staff, it could still pay 200% bonuses to its remaining investment bankers on more than £400,000 a year without increasing its overall pay and bonus bill.
Labour’s Treasury spokesman Chris Leslie accused the PM of misleading MPs over the Government’s stance.
“RBS has been reducing the number of bankers on their roll by about 2,000 bankers less in the last year,” he said. “You’d expect their total pay bill to actually start to fall, so it should.
“But it still doesn’t get out of the question about those individual senior bankers, those earning £400,000 or more, whether the shareholder, in this case the Chancellor, is going to give them permission not just to have bonuses of 100% of their salary but to bust through that and go to 200% of their salary.”
Shadow Foreign Secretary Douglas Alexander said the public would think it “intolerable” if RBS rewarded its staff so handsomely when it was losing money and failing to lend to small firms.
Under new European Union rules, banks have to get approval from its shareholders if they want to pay bonuses of more than 100% of salary.
Chancellor George Osborne is in charge of the taxpayer’s major shareholding in RBS and could give permission
But he is fighting the rules anyway, claiming they will see banks paying more in salaries.
“It will lead to a situation where you will not be able to get money back off bankers when things go wrong,” he said.
He was backed by Bank of England Governor Mark Carney, who gets £900,000 in pay and perks. He said he was opposed to a “crude cap on bonuses”.
If RBS does decide to award 200% bonuses next year, shareholder approval would have to be sought.
The bank is still heavily loss-making and has faced serious allegations over its treatment of small businesses.
Labour leader Ed Miliband will today suggest limiting the size of the big five – RBS, HSBC, Barclays, Santander and Lloyds – to encourage more competition and will help consumers and small businesses.
“We have got to give customers more choice,” said Mr Leslie. “Fees and charges are too high. There is not enough of a sense of competition, a hunger among the banks to serve customers.”