UKFI, the body set up to manage the Government’s investments in financial institutions, approved the bonus pool, which is believed to be about £1.3bn, despite RBS reporting a loss of £3.6bn for 2009.
UKFI’s consent was required for 2009 as a condition of the Accession agreement in relation to the UK Asset Protection Scheme, the insurance scheme set up to help banks with bad loans.
A statement from UKFI says: “The RBS Board has confirmed that the proposals represent the minimum necessary to retain and motivate staff and therefore to protect the value of the taxpayer’s substantial investment in the bank.
“The revenue pay-out ratio in the investment bank is the lowest of any such reported ratio for other major investment banks in 2009, and the RBS board has reduced bonuses to take account of support from the taxpayer, the recent financial performance of the Group and the Chancellor’s bonus tax.
“The structure of the awards includes high levels of deferral, ensuring that all staff receiving a bonus and earning a salary of over £39,000 will have a significant exposure to the RBS share price alongside the taxpayer.”