Evidence of desperate last minute redundancies to protect the bonus pool at RBS

It is not ok for RBS to pay its investment bankers generous bonuses. It is, however, fine for it to make people redundant in the final quarter of the year in order to avoid having to pay them any bonuses at all.

This, it would appear, is what happened in the final months of 2010.

Between September 2010 and December 2010, RBS reduced headcount in its Global Banking and Markets division by 800 people, or 4%. Despite this, compensation per head in the business is down 11%.

Last year, RBS Global Banking and Markets employed 17,900 people and paid them a total of 2.9bn. This year, it employs 18,700 and is paying them 2.7bn. Average compensation per head for 2010 is therefore 144k, of which around 50k is bonus.

Last year, average compensation per head was 162k and the average bonus was 73k.

Vesting schedule apparently improved for juniors

To help assuage the disappointment of a) lower compensation per head and b) a lower bonus, insiders say RBS has tweaked its vesting schedule.

RBS investment bankers will be receiving a mere 2k of their bonuses in March, with another instalment in June 2011 and further instalments in June 2012 and June 2013.

Last year, RBS's deferral was massively front loaded, with people receiving 50% in stock in June 2010 and 25% each in June 2011 and June 2012.

This year, one insider says RBS will allow more to vest in June 2011, particularly for staff at the junior end. "For junior staff, the vesting schedule is better than last year and more similar to our main competitors," she tells us.

As we have observed, banks like Citigroup and Goldman Sachs seem to be paying a lot of cash this year, with some senior staff at Goldman said to be receiving as much as 80% immediately. It's not clear whether RBS is being quite this generous, however.