(Adds share price, pay levels starting in second paragraph.)
Jan. 9 (Bloomberg) -- Pay and bonus levels at state- controlled Royal Bank of Scotland Group Plc will reflect performance, Prime Minister David Cameron’s spokesman said.
The prime minister yesterday criticized bosses who take high pay when their company’s share price hasn’t risen. His spokesman, Steve Field, refused to comment today on whether RBS Chief Executive Officer Stephen Hester is entitled to a bonus, given that the company’s share price has fallen by almost half over the past year.
Shares in RBS were 0.7 percent higher at 20.65 pence at 12:30 p.m. in London. On Jan. 10, 2011, they closed at 39.5 pence. Field said the issue of pay at RBS is being handled by U.K. Financial Investments Ltd., the government’s arm’s-length manager of its bank holdings.
“UKFI is set up as the shareholder and is very clear that it will make sure that pay at RBS reflects performance,” Field told reporters in London. “We don’t get involved in individual decisions at RBS. No decision has been taken on any of these things.”
Hester was paid 3.27 million pounds ($5.05 million) in salary, bonus and benefits for 2010, while Finance Director Bruce Van Saun was paid 2.3 million pounds. Hester could be paid 4.2 million pounds in shares if he meets targets set in an incentive plan by next year. Under the same plan, Van Saun could be paid 2.5 million pounds, according to RBS’s annual report.
The Financial Times reported today that John Hourican, CEO of RBS’s investment bank, stands to receive a special bonus of more than 4 million pounds in April, under an agreement made in 2009. The Unite union, which represents the bank’s junior staff, described that as “astonishing.”
“Yesterday David Cameron toured the television studios posing as a prime minister tough on excessive pay rewards,” David Fleming, national officer of the union, said in an e- mailed statement. “Today we see the 84 percent government backed bank completely ignoring his pleas.”
--With assistance from Howard Mustoe in London. Editors: Eddie Buckle, Andrew Atkinson
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