Mark Kleinman and Patrick Hennessy
Sunday, Feb 7, 2009
The Royal Bank of Scotland (RBS) is proposing to pay close to £1 billion in bonuses to its staff, just months after it was rescued by a £20 billion taxpayer bail-out, The Sunday Telegraph can reveal.
The bank’s board has begun discussions about the bonuses with UK Financial Investments (UKFI), the body set up by the Treasury to manage the Government’s shareholdings in Britain’s ailing banks.
The scale of the plan is likely to increase public anger as the recession deepens, and add to the frustration of ministers. It comes as Alistair Darling, the Chancellor, announces in The Sunday Telegraph today his plans for an independent review of the way banks are managed, including the bonus system.
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The review, which ministers hope will address voters’ concerns about big payments to executives, will examine the roles of directors and institutional investors and study how British banks compare with overseas institutions.
“We cannot return to business as usual,” writes Mr Darling in this newspaper. “It is in everyone’s interest to get banks’ governance right. It would be wrong to reward people whose excessive risk-taking brought the banks down, causing misery to millions of their customers. Success should be rewarded. Failure should not.” The Chancellor will announce the detailed terms of reference of the review, and its chairman, tomorrow.
In an attempt to appease ministers, RBS has indicated that no individual banker will receive a bonus with a cash element of more than £25,000 under its plans.
This article was posted: Sunday, February 8, 2009 at 5:22 am