Royal Bank of Scotland has courted further controversy over ‘fat cat’ pay after handing a £1.9million ‘golden hello’ to its new finance chief.
Ewen Stevenson was awarded 584,506 shares on his first day in the job on Monday to compensate him for payments he forfeited at his previous employer Credit Suisse.  RBS shares are currently worth 326p each, up 2.3p on the day. Stevenson will enjoy an annual package of £1.9million a year, including a £800,000 salary, £280,000 in pension contributions, and £26,250 in benefits.

The New Zealander, who was born in the UK, will also receive a controversial £800,000 fixed shares ‘allowance’, used by banks including RBS to swerve the EU bonus cap.  Stevenson was recruited after Nathan Bostock resigned in December to join Santander UK after just ten weeks in the role.

Yesterday sources at RBS claimed that the amount in bonuses forfeited by Bostock at the bank was ‘multiple times’ the value of Stevenson’s golden hello.  But it turns up the heat on the state backed bank, which is still 81 per cent owned by the taxpayer and slumped to a £8.2billion loss last year.

RBS was accused of wasting taxpayers’ money after handing a £3.2million ‘golden hello’ to current chief executive Ross McEwan when he joined as retail boss of the bank in August 2012.   The Government last month blocked RBS from paying bonuses twice the size of salaries – but approved the new pay measure at Lloyds.  Under new European rules, banks now need the approval of shareholders to award bonuses of up to 200 per cent of fixed pay, so the part-nationalised players have to ask the Government.

RBS was told by UKFI, which manages the Treasury’s 80 per cent stake, that it will not support a resolution which proposes a 2:1 ratio because the bank has not yet completed its restructuring and remains majority public-owned. It means the proposal will no longer be put to shareholders at its AGM in June.

Lloyds and Barclays have both received approval from their shareholders to pay bonuses worth up to twice annual salary.

RBS is now working on plans to change pay structures to keep top staff. This is likely to include a boost to their basic pay packages.  It has warned the restrictions have left it facing a ‘commercial and prudential risk’, with top staff tempted to desert to better paying rivals.