Royal Bank of Scotland faces new bankers' bonus row

15th Jan 2014 14:43

A fresh row engulfed Royal Bank of Scotland on Wednesday amid claims that the state-owned bank was planning to seek shareholder approval to pay maximum bonuses allowed under new EU bank pay rules.RBS and most other City banks are set to invoke a clause in European law that allows them to pay bonuses of twice the level of annual salary, according to a report in the Financial Times.The new EU legislation caps bankers' bonuses at a level equal to annual salary unless investors allow the further increase.The UK's Labour Party challenged Prime Minister David Cameron and the coalition government to stop the bank paying the higher level of bonuses.Labour said it was a national embarrassment that the coalition had left it to the EU to try to cap British bankers' bonuses and was due to stage a vote on the issue later on Wednesday.Cameron responded by refusing to back a cap on RBS bankers' bonuses and instead pledged to keep a £2,000 cap on cash bonuses for bankers and refuse to allow the overall pay bill to rise. But he declined to say whether share bonuses would be limited.The investment banking arm of RBS paid out a bonus pool of £287m in 2012 and is due to set bonus payouts for 2013 next month.A spokeswoman for RBS said: "No decisions have been taken, we are consulting with our shareholders in the normal way."The controversy is the latest to hit RBS, which was bailed out by the government in the financial crisis and is 81% owned by the British taxpayer.It has been hit with multi-million fines over alleged involvement in the Libor rate-fixing scandal.RBS is also facing a probe by City regulators into allegations that it tried to profit from struggling business customers.Shares in RBS were up 6.9p at 376.5p in afternoon trading in London. PW