Stephen Hester may be wondering how to pay for all his gardeners, but RBS’s other bankers may have more prosaic issues to worry about – like mortgage payments.
Even though Hester has foregone his bonus, RBS’s £500m bonus pool will need to be spread thinly if it’s to cover all the staff in global banking and markets.
The Telegraph suggests today (without giving a source) that five top RBS bankers (Michael Lyublinsky, head of GBM in the US arm; Scott Eichel, who runs securitised products and US credit; Peter Rading, co-head of FICC; Peter Nielson, head of global markets; and Brian Reid, head of research and strategy) will receive a combined £30m in bonuses this year.
RBS also employs a further 318 or so code staff. Last year, they earned £1.16m each (a lot less than anyone else except the 280 code staff at HSBC, who got £1.05m). Even if their pay is reduced by 25%, they will each receive £870k, at a cost to the bank of £277m.
With RBS’s code staff taking £277m of the bonus pot, and its five top bankers taking £30m, that leaves £223m to be shared between the remaining 18,000 staff: £12k each.
This is in line with the £12.5k average bonus paid out across the UK finance sector last year, retail banks included.
Payments averaging £12.5k may still cause public opprobrium. David Cameron is now calling for “restraint” in awarding other senior RBS bankers' bonuses and Vince Cable has allegedly called upon RBS people to follow Hester in giving their bonuses up. The Labour Party is simply reiterating its calls for the re-imposition of a bonus tax.
(NB. As we pointed out yesterday, RBS insiders are also saying that Hester's 2011 bonus will be clawed back due to the company's poor share price. This fate seems likely to befall other RBS bankers too.)