LONDON – Royal Bank of Scotland Group PLC and HSBC Holdings PLC, two of Britain’s largest banks, awarded about 10.6 million pounds ($17.8 million) in shares to senior executives as regulators impose limits on cash bonuses.
RBS granted 10 executives stock with a total value of 3.5 million pounds ($5.9 million), the Edinburgh-based lender said in a statement on Tuesday. Rory Cullinan, who oversees the lender’s bad bank, received the most at 533,000 pounds ($896,000).
HSBC awarded 15 senior managers 7.1 million pounds ($11.9 million), according to a separate statement. Samir Assaf, head of the global banking and markets unit, received the most, at about 1.5 million pounds ($2.5 million). CEO Stuart Gulliver got about 848,000 pounds ($1.4 million), while Finance Director Iain Mackay and Chief Risk Officer Marc Moses were each awarded 474,000 pounds ($797,000), the London-based company said.
Regulators are forcing banks to limit cash bonuses to no more than twice fixed pay in a bid to rein in risk-taking that many policy makers blamed for causing the financial crisis of 2008. Lenders have sought to mitigate the limits by raising base salaries or by giving staff allowances depending on seniority, known as role-based pay. Banks consider those as part of salary, and so they aren’t affected by the bonus caps.
HSBC said the 20 percent of the shares awarded will be subject to retention until March 2015 and the remainder until March 2020.
RBS dropped plans to seek shareholder approval to pay bonuses of twice fixed salary, the maximum under European rules, after U.K. Financial Investments, which manages the government’s 80 percent stake, said it would veto the move. The lender said it would still pay bonuses of up to base salary.
The RBS shares, awarded as a fixed-share allowance for the eight months to Aug. 31, will be released in five equal installments over five years, according to the statement.
RBS rose 0.7 percent to 342 pence ($5.74) in London trading on Tuesday. HSBC also rose 0.7 percent to close at 630.10 pence ($10.57).