Royal Bank of Scotland has handed top bosses shares and other long-term awards worth up to £22m less than a fortnight after the taxpayer-backed lender posted its ninth consecutive annual loss.
Despite slumping £7bn into the red last year, RBS has granted long-term incentive awards worth a maximum of almost £16m to nine executives, including boss Ross McEwan.
The shares are subject to performance targets and are due to vest between 2020 and 2024. A further £5.9m of share awards have vested, including £1.2m for the RBS chief.
The bank, which was bailed-out in 2008 at the height of the financial crisis and remains 72pc Government-owned, has now racked up cumulative losses of about £58bn since falling into state hands.
Mr McEwan warned investors last month that the bank expects to stay in the red this year too before hopefully returning to profit in 2018. It means that RBS will have been loss-making for a decade. The government confirmed today that it does not expect to sell any shares in the lender for at least five years.
It comes as RBS prepares to swing the axe on yet more branches and jobs. Last month, the New Zealander revealed he planned to cut a further £2bn in costs by the end of 2020 including £750m this year, although he declined to give figures for job and branch cuts.
RBS staff have already suffered heavily since its rescue. Its headcount has shrunk from 180,000 employees in 2008 to 80,000 now, mainly through job cuts. As more and more customers bank online, it has also closed 450 branches since the end of 2013, taking its network down to about 1,550 sites.
Despite recent speculation that he could resign, Mr McEwan has pledged to stay with the bank to see the latest cost-cutting drive through. He has been at the helm of RBS since October 2013.
Indeed, despite the lender’s spiralling losses, he has started to make progress tackling the long-standing problems from the past that continue to overhang the bank.
RBS recently announced it was setting aside £3.1bn in anticipation of reaching a settlement with the US Department of Justice over claims it mis-sold toxic mortgage-backed securities that contributed to the financial crisis. While the bank’s final bill is likely to be higher, the provision cheered investors.
The Government also last month proposed an alternative package of measures to boost SME banking in the UK that would allow RBS to abandon a troublesome sale its Williams & Glyn (W&G) division.
The European Commission demanded the disposal of W&G as a condition of RBS’s 2008 rescue but has proved impossible for the lender to accomplish.
Separately, FTSE 100 miner Anglo American has granted chief executive Mark Cutifani 106,000 shares worth £1.2m at Anglo’s current share price. These will vest in 2020 and 2022, subject to his continued employment.
Anglo, which was stung by a shareholder rebellion last year when 42pc of investors voted against its pay policy in a non-binding protest, has proposed capping future share awards under its long-term incentive plan as well as those made since 2014.
Under this scheme, which will be put to shareholders at its AGM in April, Mr Cutifani’s total pay is expected to fall.
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