500 bank workers paid more than £1m

BarclaysThe scale of mammoth pay packages in the banking industry has been laid bare as Royal Bank of Scotland and Barclays revealed that over 500 workers between them were paid more than £1 million last year.

In reports released just hours apart, taxpayer-backed Royal Bank of Scotland said it paid 95 staff more than £1 million, while 428 employees at Barclays also picked up pay deals worth over £1 million - including five who got more than £5 million despite a year of scandal and falling profits.
RBS, which is 81% owned by the Government, said total pay for its eight most senior executives was £21 million, although this was down 16% on 2011. One of the bank's most senior workers earned £4.8 million, including long-term incentive shares that will pay out if certain future targets are met. Its report also showed of the 95 employees in the millionaires' club, 36 earned between £1.5 million and £5 million and one was paid more than £5 million. But the average salary across all its staff was £34,000.

Trade unions hit out over "rampant inequality" between pay for those on the front line and bankers at the top as Barclays said more than 71,500 staff received less than £25,000 in 2012. Dominic Hook, Unite national officer for finance, said: "The rampant inequality in the pay between the top Barclays executives and those on the front line who deal directly with customers is shocking and needs to be addressed by the chief executive, Antony Jenkins, as a matter of urgency."
RBS boss Stephen Hester did not receive an annual bonus for last year, although he was awarded £1.6 million in deferred long-term bonus shares. Finance director Bruce Van Saun received a £980,000 bonus and long-term shares worth £1 million, taking his total pay package to £2.7 million, according to the bank's remuneration report.

RBS has already been criticised for handing out £607 million in bonuses in 2012 as it reported £5.2 billion in annual losses. The bank also suffered a series of reputational blows last year, including its £381 million settlement for attempting to rig interbank lending rates, mis-selling scandals and last year's IT meltdown which left millions of customers without access to their bank accounts.

Penny Hughes, chair of RBS's remuneration committee, said the committee had "spent a great deal of time challenging and taking action in response to past events and considering how remuneration can help to drive appropriate behaviours at RBS in future". But anger has failed to subside against banks after they continued to pay out hefty bonus windfalls despite being embroiled in scandal.

Barclays said it reduced its 2012 bonus pool by £860 million for Libor rigging and mis-selling, while it clawed back an additional £300 million in previous awards and long-term incentives for the Libor scandal. A potential £3.3 billion bonus pool was also reduced by a further £250 million to better align its pay in the market, although it still shared out a total incentives pot worth £2.2 billion. This saw employees pick up an average £13,000 in bonuses last year, with investment bankers taking £54,100 on average.

The report also confirmed that former Barclays boss Bob Diamond - who quit last summer in the wake of the bank's Libor-fixing settlement - will continue to be paid salary and pension until July. He stepped down last summer, but remains entitled to an annual salary of £1.4 million and £675,000 a year cash in lieu of pension. Sir John Sunderland, head of Barclays' remuneration committee, said in the report: "I hope that 2012 will be seen as a turning point in the way Barclays approaches remuneration." He added that the committee will continue to focus on overhauling pay and bonus practices across the bank over the coming months.

TUC general secretary Frances O'Grady said the scale of pay suggested Barclays is "acting as if the financial crisis never happened". She added: "But ordinary people, who have been made to pay for the folly of bankers, have longer memories and will find the size and scale of these payouts obscene. The EU is absolutely right to push ahead with its bonus cap and George Osborne should start siding with the interests of the electorate and the wider economy, rather than the rich and powerful elite in the City."

© 2013 Press Association
Read Full Story