RBS's Goodwin in line for £8m bonus
Heather Connon,
investment editor
Fred Goodwin, chief executive of the Royal Bank of
Scotland, could qualify for a bonus of up to nine times his salary - more
than £8 million - according to Manifest - the proxy voting service.
Under the bank's medium-term bonus scheme, directors can be awarded shares
worth up to 150 per cent of their salary plus bonus every year. While
bonuses were capped at the basic salary, the 2003 annual report says
directors are now eligible for up to twice their salaries 'for exceptional
performance, as measured by the achievement of significant objectives'.
These are not spelled out.
Manifest said that this means directors could be awarded shares equivalent
to four-and-a-half times their basic salary every year. If the bank's
performance is in the top 10 per cent of a group of 10 rivals over a
three-year period, these awards could be doubled again,
bringing the total to 900 per cent of annual salary.
Last week, the bank admitted it owned a Dassault
Falcon 900 jet worth £17.5m for the use of Goodwin and the board, a fact
not disclosed in the annual report. Goodwin has made no comment on the jet
or his remuneration. A Royal Bank spokesman said the bonus plan was
approved by shareholders in 2001 and is linked to shareholder return
against a peer group. 'It is difficult to speculate on the value of the
award as it will be based on the share price at the end of the year.'
Manifest said: 'At the time the scheme was adopted, the cap was 100 per
cent of salary (60 per cent for certain directors). It is only now that
the true potential of this scheme is becoming apparent.'
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