Taxpayers’ bank RBS pays two execs £10m

Fury grew today over new rules aimed at controlling City bonuses as it emerged that Royal Bank of Scotland, which is controlled by the taxpayer, has spent more than £10m hiring two executives from rival banks.

RBS, which is 70 per cent owned by the Treasury, has given a £7m one-year guaranteed pay and bonus package to Antonio Polverino, who it recruited from investment bank Merrill Lynch.

Bruce Van Saun, who was revealed as RBS's new finance director last week, is likely to earn several million pounds in pay and bonuses when he starts next month. He collected £10.5m when he left Bank of New York Mellon a year ago and his last full-year pay cheque was for £5.4m. RBS said it would not comment on individuals' contracts.

The revelations come the day after the City watchdog was accused of watering down its new rules on bankers' pay and bonuses. Politicians said the Financial Services Authority had caved in to lobbying from banks.

Critics said it turned what was to be a rule on bonuses being paid out over a three-year period into guidance, and gave approval for banks to pay bonuses even if they made a loss.

The Treasury made it clear that it was unhappy with the FSA's plans.

City Minister Lord Myners said: "The short-term bonus culture in the global banking industry must end.

"The Government is pursuing all options to ensure banks can no longer get away with risky pay and bonus policies that contributed to the crisis."