(Adds details, background)
By Steve Slater
LONDON May 13 The former boss of state-backed
Royal Bank of Scotland's U.S. arm Citizens was paid $7.5
million last year, including $500,000 in consultancy fees for
three months after she left.
Ellen Alemany was in charge of RBS Citizens for five years
until she was replaced by Bruce van Saun at the start of
October. Her pay was not always disclosed, but she was known to
be one of the bank's top earners and sources have said she
received more than 5 million pounds ($8.4 million) in 2012.
RBS is 80 percent owned by the British government after its
45 billion pound ($76 billion) bailout during the financial
crisis, which has served to make its pay awards an even more
politically sensitive issue amid public concern over bonuses
paid throughout the banking community to those seen by some as
partly to blame for the 2008 crisis.
Documents filed for an initial public offering for Citizens
in the United States late on Monday showed that Alemany, a
former Citigroup executive, was paid a $2.1 million
salary by RBS last year, plus $4 million in stock awards and
$1.4 million in other compensation.
That included $500,000 "as compensation for providing
consulting services to us upon request" after she stepped down,
the document said. A spokeswoman for RBS said that the
consulting services were to help to ensure a smooth transition
for incoming CEO van Saun.
Alemany's other benefits included $66,579 as reimbursement
of taxes related to financial planning, a pension allowance of
$740,385, plus $27,500 the bank paid in charitable donations to
match those made by Alemany.
By comparison, RBS Chief Executive Ross McEwan can earn up
to 5.4 million pounds a year, though he has waived his potential
bonus for this year. U.S. bank bosses, however, are typically
paid far more than in Europe. JPMorgan CEO Jamie Dimon
received about $20 million last year, while the bosses at
Citigroup and Bank of America each received about
Alemany, who joined the board of U.S. lender CIT in
January, is also due to receive more than $10 million more in
RBS awards that have not yet vested, including $8.1 million from
long-term share awards subject to performance conditions and
$2.3 million under RBS's pay deferral plan.
Van Saun, who was RBS's group finance director before taking
the helm at Citizens, was paid $5.7 million last year.
He and other senior executives are due to be given "special
IPO awards" this year instead of long-term share awards for
their performance in 2013. The IPO filing said share awards
would be made in 2016 and 2017, with one of the conditions being
that the IPO takes place before the end of this year.
RBS has said it wants to sell 20-33 percent of Citizens in a
New York IPO this year to strengthen the parent group's capital
position. The flotation could be delayed, however, after the
U.S. Federal Reserve objected to its capital plan in March,
requiring RBS to resubmit how it will deal with rising losses
under a stressed financial scenario.
Analysts have said the IPO could value Citizens at between
$9 billion and $15 billion.
The IPO document said that Citizens aims to spend $500
million in the next two years on infrastructure and technology,
aiming to cut costs, improve services for customers and improve
technology resilience after problems encountered in Britain over
the past year.
($1 = 0.5927 British Pounds)
(Editing by David Goodman)