Financial Risk Manager

Ways of Financial and Risk Management

RBS announces Pay and Rewards Settlement for 2008
Wednesday, March 4, 2009

RBS Group can confirm that it has reached agreement with the UK Government as majority shareholder (through UK Financial Investments) on its approach to Pay and Reward for 2008/09. The outline of the approach is as follows:

No Reward for Failure due to losses suffered in 2008.

Board will receive no bonus for 2008 performance and no pay increase in 2009.

Pay 2009: A pay freeze for Directors and Executives in the Group worldwide, other staff will receive below inflation pay rises.

Bonuses for 2008: No discretionary cash bonuses will be paid in 2009 for performance in 2008.

Protection for lower paid staff: The existing Profit Share "bonus" scheme worth 10% of salary will not be paid for 2008, and will be terminated for all future years.

Deferred awards: Staff who are essential to the bank's recovery and who might otherwise be at serious risk of leaving, and who remain with the Bank will receive a deferred award for 2008.

Claw back of deferred awards: In individual cases up to 100% of these deferred awards will be subject to forfeiture at the discretion of the Remuneration Committee and if future losses arise in relation to their 2008 activities .

Deferred Amount: The total amount of deferred awards will be finalised following our forthcoming company announcement relating to the Group's Strategic Review.

Future Policy: RBS is undertaking a fundamental review of its approach to future remuneration to ensure that incentives are well aligned to the interests of shareholders.

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Further, RBS Pakistan is available for sale as management has finalized to close its operation in Pakistan. Interested and prospective investors can approach concerned authorities.

Labels: Banks, Economy and Business