Govt firm over RBS bonuses
Thursday, 5 February 2009 12:00 AM
By Alex Stevenson
RBS faces huge pressure from the government not to award its executives hefty bonuses when it releases its annual results later this month.
A report in the Times newspaper claimed some of its employees were heading for six-figure bonuses with the total heading into tens of millions of pounds.
That prompted the government, which is expected to own 70 per cent of the bank, to restate its determination to prevent such excesses.
Business secretary Peter Mandelson outlined his position at the launch of a £3 billion project helping small businesses.
"Of course you have got to do all you can to recruit the best people and keep the best people in place - there is a huge job on our plates," the BBC quoted him as saying.
"On the other hand the banks have got to be sensitive to public opinion and I think they need to think about what is the best way forward."
That position has been reiterated by Downing Street, which has stuck closely to Lord Mandelson's line since the new year.
"We're already said there needs to be a new approach to the reward for senior financial [figures], the prime minister's spokesman said.
He added there will be "no rewards for failure" and pressed the need for appropriate incentive structures and "appropriate levels of executive pay".
RBS has already admitted its annual results, due later this month, are likely to see up to £7 billion in writedowns.
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