Darling risks RBS exodus over bonuses

3rd Dec 2009 08:36

Bosses at state-owned Royal Bank of Scotland could resign if the Treasury starts interfering with the £1.5bn bonus pot available to staff at the bank's investment arm.News that chancellor Alistair Darling is ready to veto the huge payout prompted the bank's lawyers to suggest a mass departure at board level.They think tinkering with bonuses by the government, which currently has a 70% stake in RBS, could threaten the bank's ability to remain competitive.Indications are that Darling won't accept a bonus pool much in excess of last year's £1bn, but RBS is expected to make £6bn from investment banking this year, implying an increase of 50% in bonsues.Directors argue that they'll need to pay more for 2009 if they're to keep the best talent next year and keep generating bigger profits for shareholders and taxpayers.If star traders leave the firm profits could fall and cause a slump in the value of the government's stake.