Why the real RBS bonus pool is smaller than 1.3bn
Today is RBS results day. The two most salient facts are already known: RBS made a 5bn loss for 2009 and its bonus pool is 1.3bn.
Given that RBS appears to have taken a scythe to global banking and markets headcount (or that so many people have made for the exits), it looks deceptively as if the bonus pool will go further than initially thought.
According to the Telegraph, headcount in global banking and markets is now a mere 17,200, down from 20,200 at the end of 2008 and 24,100 at the end of 2007.
This makes the average bonus 75k, and average pay per head 170k.
However, this may be overstating the reality. According to RBS insiders, the 1.3bn pot includes generous deferred bonuses promised to ex-ABN staff under their 'keep' compensation policy. When these are removed, the pot is likely to be much depleted.
Under the old ABN system, around one third of compensation over €100k was deferred for three years. The last time anything was paid under the keep system was reportedly 2008. However, 2010 marks the last year for payments from the generous 2007 bonus pot. Once these are made, remaining ex-ABN staff will be free to go.
The pure RBS people who were left with their scraps may feel inclined to look elsewhere too.
