RBS 2012 Annual Report Download - page 343

RBS GROUP 2012
341
Remuneration of executive directors and eight highest paid senior executives*
All figures shown below are in GBP. No sign-on or severance awards have been made during 2012 to any of the individuals detailed below.
Stephen
Hester
Bruce Van
Saun Executive 1 Executive 2 Executive 3 Executive 4 Executive 5 Executive 6 Executive 7 Executive 8
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Fixed remuneration 1,200 750 1,735 775 700 421 311 775 394 650
Variable remuneration (cash) — — 2 2 2 2 2 — 2 —
Variable remuneration
(shares subject to retention) — — 410 280 158 101 116 — 105 —
Deferred variable
remuneration (bond) — — 1,023 698 393 252 289 — 173 —
Deferred variable remuneration
(shares subject to retention) — 980 615 420 237 152 174 — 70 —
Total variable remuneration (1) — 980 2,050 1,400 790 507 581 — 350 —
Total remuneration 1,200 1,730 3,785 2,175 1,490 928 892 775 744 650
Long Term Incentive Awards
(subject to future performance) (2) 1,620 1,013 994 1,125 675 — 969 — 270 —
* Members of Group Executive Committee plus Group HR Director
Notes:
(1) Differs to 2011 disclosure with exclusion of prior year Long Term Incentive Awards which vested during 2012.
(2) The Long Term Incentive Award (subject to future performance) is made following the end of the 2012 financial year. The amounts shown reflect an approximate notional value, verified by external
advisers. The actual value of the award which will vest in 2016 will be dependent on actual performance and share price.
LIBOR
On 6 February 2013, RBS made an announcement regarding the
investigations conducted in relation to attempts to manipulate LIBOR and
the settlements reached with the FSA and US authorities. The
investigations uncovered wrongdoing on the part of 21 employees,
predominantly in relation to the setting of the bank’s Yen and Swiss Franc
LIBOR submissions in the period October 2006 to November 2010.
The RBS Board has acknowledged that there were serious shortcomings
in our risk and control systems, and also in the integrity of a small group
of our employees, and has taken action to ensure full and proper
accountability:
x All 21 wrongdoers referred to in the regulatory findings have left the
organisation or been subject to disciplinary action.
x Individuals found culpable have left the bank with no 2012 variable
compensation awards and full clawback of any outstanding past
variable compensation applied.
x Supervisors with accountability for the business but no knowledge or
involvement in the wrongdoing have received zero variable
compensation awards for 2012 and a range of clawback from prior
years depending on specific findings.
x Reduction of variable compensation awards and long-term incentive
awards and prior year clawback has been made across RBS and
particularly in the Markets division to account for the reputational
damage of these events and the risk of additional outstanding legal
and regulatory action.
The actions we have taken reinforce the messages we are sending on
how seriously the Board takes integrity and risk and control issues. The
impact of such issues on our shareholders and wider stakeholders
extends beyond those directly involved in LIBOR, so it is appropriate that
remuneration actions have a Group-wide impact.
The cumulative impact of the Board’s actions is a deduction from
employee incentive pay of over £300 million, with the Markets division
bearing the greatest cost. A breakdown of how this figure has been
reached is set out below:
£m
Variable compensation award reduction 110
Long term incentive award reduction 30
Clawback of prior year awards (including LTIP) 112
Committed future reduction 2013/2014 50
Total 302
Other remuneration disclosures