RBS executive in line for £4m bonus

The head of RBS’s embattled investment bank is in line to receive a special bonus this year of more than £4m, as the bank begins a sell-off of the division which could threaten 10,000 jobs.

John Hourican, chief executive of RBS’s global banking and markets division, was awarded almost 29m shares and options in 2009, as part of a long-term initiative to restructure the group following its disastrous tie-up with Dutch lender ABN Amro, the FT reports.

The disclosure threatens to inflame the row over bankers’ bonuses and the perceived reward for failure in the City, as RBS prepares to dramatically scale back its investment bank.

RBS, which is 83% owned by the UK taxpayer, declined to comment on Hourican’s 2009 bonus package.

However, filings show that he was awarded 21,276,596 shares and a further 7,446,809 options in April 2009, subject to meeting unspecified performance targets over a three-year period.

At Friday’s closing price of 20.5 pence, Hourican’s share award would be worth £4.4m if he has met all the prescribed targets, according to the FT.

The options, with an exercise price of 28.2 pence, are currently valueless, although the stock traded at that price in early August.

Last week Barclays Capital analysts forecast further writeoffs for RBS in the coming years, with an estimated £1bn of mortgage impairments expected. However, BarCap said the bank should remain profitable and have a strong capital position despite the headwinds it faces.