UK's Cameron will veto any plan to increase RBS pay pot

Wed Jan 15, 2014 7:59am EST
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By William James and Matt Scuffham

LONDON (Reuters) - British Prime Minister David Cameron said on Wednesday he would block any proposal to increase the overall pay and bonus bill at state-owned Royal Bank of Scotland (RBS.L: Quote).

The opposition Labour party has called on the government to oppose any plan by RBS to pay top staff bonuses worth twice their salaries.

Cameron told parliament the government would veto "any proposals to increase the overall pay, that is the pay and bonus bill at RBS, at the investment bank".

Labour argued that the government should not allow the heavily loss-making bank to seek shareholder approval to bypass the bonus cap imposed by the European Union at a time when ordinary families face a cost-of-living crisis.

The showdown will hamper efforts by its new boss Ross McEwan to steer calmly through the bonus season. McEwan waived his annual payout following public anger over the pay of his predecessor Stephen Hester.

RBS, 81-percent owned by the state, had been expected to join rivals, such as Barclays (BARC.L: Quote) and HSBC (HSBA.L: Quote), in seeking shareholder approval to pay bonuses twice the size of salaries. The EU bonus cap allows banks to double bonuses if the win shareholder backing.

Cameron did not say specifically that the government would veto such a request.

Britain's finance minister George Osborne and many banks in London oppose the curbs, arguing it will force up fixed salaries and could drive important staff to rival institutions not bound by the rules.   Continued...

Britain's Prime Minister David Cameron leaves Downing Street in London December 19, 2012. REUTERS/Neil Hall