RBS Executives Receive Significant Pay Increases Despite Record Profits

Strategic Insights -

Sir Fred Goodwin, the chief executive of Royal Bank of Scotland, saw his pay rise by nearly a third to £2.5 million last year, with a £1.5 million performance bonus contributing to the total. The bank's profits reached a record £8.1 billion in 2004, a 15% increase from the previous year. Larry Fish, who runs RBS's American operation, received a 23% pay rise, taking his earnings to £2.3 million, boosted by a £1.6 million bonus. The bank's chairman, Sir George Mathewson, saw his annual salary and benefits package rise by about 8% to £581,000.

Key Takeaways:

  • Sir Fred Goodwin's pay rose by nearly a third to £2.5 million, with a £1.5 million performance bonus contributing to the total.
  • Larry Fish's pay rose by 23% to £2.3 million, with a £1.6 million bonus.
  • Sir George Mathewson's annual salary and benefits package rose by about 8% to £581,000.
  • The bank's profits reached a record £8.1 billion, a 15% increase from the previous year.
  • The RBS chairman stated that the executive pay and benefits packages reflected the bank's successful performance during the year.
  • The pay package is described as competitive and representing excellent value for shareholders.
  • The bank's US division's profits were boosted by a contribution from Charter One, the US bank purchased by RBS through Citizens, its US operation.
  • Sir Fred Goodwin's total potential payout in 2004 was approximately £3.1 million, with a further £593,140 available to him under the medium-term share incentive plan.

Statistics:

  • Pay increase for Sir Fred Goodwin: by nearly a third to £2.5 million (2005)
  • Pay increase for Larry Fish: 23% to £2.3 million (2005)
  • Total profits for RBS: £8.1 billion (2004)
  • Pay increase for Sir George Mathewson: 8% to £581,000 (2005)
  • Performance bonus for Sir Fred Goodwin: £1.5 million (2005)
  • Bonus for Larry Fish: £1.6 million (2005)

Sources:

  • The Times (2005)