RBS bonuses spark tough talk
Updated on 03 December 2009
City minister Lord Myners insists RBS bankers should not see their bonuses rise in line with the bank's profits despite suggestions the board could resign in protest.
The bank will be 84 per cent state-owned under the terms of the Asset Protection Scheme and it will have to agree the size of this year's bonuses with UK Financial Investments, the body set up to manage the public stakes in financial firms.
Reports suggest the bonus pool has risen by 50 per cent compared with 12 months ago to £2.25bn and the government has warned it could veto the size of the payouts.
That warning led to claims that the RBS board could quit but Lord Myners insists no such threat has been made, describing negotiations as bing ni their early stages.
Lord Myners said state bailouts have created conditions that have allowed banks to perform better and improve their financial performance, something which he believes cannot be credited to the individual skills of employees.
He said: "It is far from clear that that should lead to wholly fortuitous payments to senior executives."
Lord Myners urged banks across the system, including those not supported by the taxpayer, to take into account the "broad public concern" over bonuses and urged institutional investors to "stand up and speak publicly" about their views on the subject.
He said that more than 5,000 bankers in the UK industry will earn more than £1m each this year unless action is taken.
