RBS Chief McEwan To Forfeit £1m 'Allowance'

The chief executive of Royal Bank of Scotland (LSE: RBS.L - news) (RBS) is to hand back a £1m chunk of his 2015 pay package, cementing his status as the lowest-paid bank boss in the FTSE-100.

Sky News can reveal that Ross McEwan, who took over at RBS in 2013, has told the bank's board that he does not want to receive a so-called 'role-based allowance', which is intended as a top-up to his £1m basic salary.

The disclosure of his decision comes as it emerges that RBS has whittled down its bonus pot to just over £480m, slightly lower than expected.

The details of RBS's pay plans will be announced later alongside annual results showing its seventh consecutive full-year since being rescued with £45.5bn of taxpayers' money.

In a statement, an RBS spokesman told Sky News: "Ross McEwan has told the RBS Board he does not intend to take the proceeds from his 2015 role based allowance.

"Ross does not want this issue to be a distraction from the task of building a great bank for customers and shareholders."

The role-based allowance - which has become a feature of bankers' remuneration in response to a new European law - was approved by RBS's shareholders at its annual meetings last June.

At RBS, which is 80%-owned by taxpayers, the awards are made in shares and are scheduled to be released over a five-year period.

When the first payment is released in August 2016, Mr McEwan has requested that the value is returned to the bank, an insider said on Wednesday.

The RBS chief also forfeited his 'allowance' last year, while seeking to avoid what had become an annual row over pay at the company.

The tenure of his predecessor, Stephen Hester, was regarded as a success by many measures but was blighted by political conflicts over bonuses.

Sky News revealed last week that RBS and Lloyds Banking Group would restrict cash bonuses to £2000 for another year.

The bank has also decided that it will no longer pay annual bonuses to any members of its executive committee in a permanent decision cast by some City investors as endangering RBS's ability to compete for talent.

Mr McEwan and other top executives remain eligible for share awards under RBS's long-term incentive plan, which in the chief executive's case can have a maximum value at award of £2m.

Thursday's results will see any hopes of a return to profit wiped out by an expected £4bn writedown of goodwill relating to Citizens (NYSE: CIA - news) , RBS's US bank.

Mr McEwan will also announce further measures to improve the performance of its corporate and investment bank, including the appointment of a new divisional head.

The group will also withdraw from 25 overseas markets, leaving it with a presence in just 13 countries, according to Bloomberg

RBS will also confirm the appointment of Sir Howard Davies as its new chairman, replacing Sir Philip Hampton.