Next RBS boss to see pension contribution cut
The frontrunner reportedly set to replace Ross McEwan as chief executive of Royal Bank of Scotland will receive £250,000 less than him due to the bank being restricted by new corporate governance rules.
According to The Times newspaper, Alison Rose, who runs the commercial and private banking side of RBS, will shortly be announced as the still more than 60 per cent state-owned lender’s next boss.
But whoever, is named, is likely to receive a £100,000 payment in lieu of pension, compared with the £350,000 Mr McEwan received as part of his £3.6 million package.
Putting Mr McEwan’s successor on the same pension terms as him would breach new corporate governance rules that force companies to limit pension payments to new executive directors to no more than those handed to ordinary staff, as a percentage of salary.
RBS declined to comment on reports that Ms Rose has been chosen as its new chief executive.
Sky News reported she would be appointed in the coming weeks, subject to regulatory approval.
If Ms Rose is given the same £1 million base salary as Mr McEwan, she would almost certainly have to accept a pension payment of no more than £100,000.
RBS could lift her base pay to compensate, but this would risk a different row with shareholders concerned about escalating base pay.
RBS has already committed to the new regime in respect of its new finance director, Katie Murray, who is being paid a pension contribution of 10 per cent of her base pay, against the 25 per cent awarded to her predecessor Ewan Stevenson who she replaced in January.
RBS said: “Our next chief executive will be confirmed in due course, once an appointment has been made.”