(Bloomberg) -- Royal Bank of Scotland Group Plc cut Ross McEwan's potential share award for 2018 by 10 percent after the bank failed to get the top customer service ratings and was deemed to need improvements to risk controls.
McEwan could receive a maximum of 1.58 million pounds ($2.2 million) in deferred shares this year, down from 1.75 million pounds in 2017, according to the Edinburgh-based lender's annual report published Friday. He was paid a total of 3.5 million pounds for 2017, down 6 percent, as he missed targets in his long-term incentive program, linked to risk controls and customer trust.
The number of employees earning at least 1 million euros ($1.2 million) fell to 83 last year from 87 in 2016. The overall bonus pool for RBS last year remained level at 342 million pounds.
RBS reported its first annual profit in a decade last year, but this was overshadowed by the uncertainty over a settlement with the U.S. Department of Justice over a mortgage-securities probe. The firm also said it would spend billions more this year on restructuring. RBS, which is still majority-owned by the government after receiving a 45.5 billion-pound bailout during the financial crisis, dropped 4.2 percent in London trading at 9:36 a.m. after its 2017 results were released Friday.
“We have moved to a long-term incentive structure with much lower maximum potential awards,” the board's pay chief, Robert Gillespie, said in the statement. “The policy supports our cultural aim of making sure that remuneration encourages the right behaviours. Executives are required to build up larger shareholdings and retain them for longer.”
To contact the reporter on this story: Stephen Morris in London at smorris39@bloomberg.net.
To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Jon Menon
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