UK Treasury take control of RBS bonus pool-paper

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

Uiteindelijk toch aktie! Bravo.

Groet / Cees

http://www.reuters.com/article/wtUSInvestingNews/idUSGEE5B100B20091202
UK Treasury take control of RBS bonus pool-paper
Tue Dec 1, 2009 11:05pm EST
LONDON, Dec 2 (Reuters) - The British Treasury looks set to clash with
some institutional shareholders of the Royal Bank of Scotland (RBS.L:
Quote, Profile, Research, Stock Buzz) after it took control of the
banks' bonus pool, The Times reported on Wednesday.

The Treasury has demanded the right to control the "quantum and shape"
of 2009 bonuses at the bank as worry over the public backlash
surrounding bonus pay for bankers continues.

The demand comes as a condition of allowing RBS to join the government's
insurance scheme for troubled assets, and agreeing to pump a further
22.5 million pounds ($37.29 million) into the bank.

News that RBS will have to agree the size of this year's bonus payouts
with UK Financial Investments (UKFI), which manages the government's 70
percent stake in the partly-nationalised bank, was revealed in a
shareholder circular last week, the paper said.

Speaking to the Times, shareholders, backed by the Association of
British Insurers, expressed concern over how the move would effect the
bank's ability to attract staff.

"This is wholly political," said one unidentified shareholder cited in
the paper. "I think the fingerprints from this are from No. 10. The
irony is they could end up ruining the business."

A Treasury spokes man told The Times: "As a major shareholder, UKFI need
to be satisfied that RBS's approach to remuneration is in keeping with
the Financial Services Authority's code of practice. We expect other
institutional shareholders to ensure remuneration practices do not pose
a risk to the stability of the organisation."

The Times quoted RBS as saying that it had agreed to the deal only
because of a need to repair its balance sheet.

Shareholders will vote on the capital raising and entry into the
insurance scheme at a special meeting on Dec 15.

RBS and the Treasury were not immediately available for further comment
on the report.

The Bank of England revealed last week that it had provided 62 billion
pounds in emergency loans to rescued Royal Bank of Scotland (RBS.L:
Quote, Profile, Research, Stock Buzz) and mortgage lender HBOS at the
height of the global financial crisis last year.

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