Government rules doesn’t stop cash payout

It seems that despite the bank’s promise to only pay rewards in shares, hundreds of Royal Bank of Scotland (LON:RBS) top traders could walk away with huge cash bonuses next summer.

Senior management and traders who receive share bonuses will be allowed to cash them out as soon as they are awarded, according to an internal letter from RBS chief executive Stephen Hester to his staff this week. Hester said: ‘The first installment of the deferred award, to be released in June 2010, will be settled in the form of either shares or debt which can be turned into cash at recipient’s option.”

This means that although bonuses for 2009 will still be deferred and spread over three years, key staff will be able to sell their shares as soon as they get them. Liberal Democrats Treasury spokesman Lord Oakeshott said: ‘This is utterly outrageous. Alistair Darling’s statement in Parliament gave no clue that bankers would be cashing in a third of their bonus in only seven months time.

RBS said: ‘The government has imposed the toughest pay conditions anywhere in the world on RBS.’ It points out that it is sticking to G20 principles that bonuses ought to be paid in shares. This comes after the government committed to inject a further £25.5billion to support RBS, in addition to the £20billion it gave last autumn. To read more on this story go to dailymail.co.uk. What do you think on huge cash bonuses next summer paid by RBS?