(Bloomberg) -- Royal Bank of Scotland Group Plc is likely to leave its bonus pool little changed this year, according to people with knowledge of the matter, ending a spate of annual declines in payouts dating back to the financial crisis.
A final decision on the discretionary awards hasn’t been made and will be taken in January, one of the people said, declining to be identified because the matter is confidential. Last year, the Edinburgh-based lender cut its compensation pool by 8 percent to 343 million pounds ($458 million), bringing the drop since 2010 to about 75 percent as RBS shrank its investment bank to reduce risk.
In a mark of progress, Britain’s biggest government-owned lender posted stronger-than-expected capital in the third quarter, signaling its potential to resume dividends, while the government plans to restart the sale of its stake by the end of March 2019. The biggest remaining obstacle to recovery is the bank’s settlement of a U.S. mortgage-bond probe.
In February, the bank said it had cut Chief Executive Officer Ross McEwan’s potential long-term incentive award by about 40 percent after RBS posted its ninth consecutive annual loss. The amount of any immediate cash bonus was still limited to 2,000 pounds, a measure introduced in the aftermath of the crisis. The bank had about 73,600 full-time employees at the end of September, according to company filings.
The bonus structure for senior executives at RBS remains designed to encourage the employees’ performance in the longer term, said one of the people.
Bankers’ pay has been in the public focus since the government was forced to bail out RBS and Lloyds Banking Group Plc for a combined 65.5 billion pounds from 2008. The U.K. still owns 71 percent of RBS, though has sold its entire holding in Lloyds.
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