August 12, 2014 / 1:51 PM / in 3 years

UPDATE 2-RBS hands out $6 million of shares in 'role-based' pay awards

* Restructuring chief Cullinan handed 530,000 in shares

* Share awards will vest over five-year period

* Annual bonuses for top managers scrapped (Adds details of FD’s award)

By Matt Scuffham and Steve Slater

LONDON, Aug 12 (Reuters) - State-backed Royal Bank of Scotland has awarded shares worth 3.5 million pounds ($5.9 million) to 10 executives under new role-based pay awards it brought in to navigate limits on annual bonuses.

Executive pay at RBS remains under heavy public scrutiny, with taxpayers sitting on a loss of nearly 15 billion pounds after Britain pumped 45.5 billion into the bank to rescue it during the 2008 financial crisis. The bank made a loss of 8.2 billion pounds last year.

RBS, which is 81 percent-owned by the government, scrapped plans to pay executives bonuses worth up to double their salary after opposition from the government. It instead agreed to pay them a maximum of one times their basic pay.

Executives received the shares, awarded for the eight months to the end of August, on Tuesday and can vest 20 percent of them each year for the next five years.

The biggest payout, worth 530,000 pounds, has gone to restructuring chief Rory Cullinan, the bank said in a regulatory filing on Tuesday. That is equivalent to 100 percent of his salary for the eight month period to the end of August.

New Finance Director Ewen Stevenson, who has only been with the bank since May, received an award worth 225,000 pounds.

Under a new European Union rule, which will apply to awards handed out from early 2015, bankers’ bonuses can be no higher than fixed pay, or twice that level with shareholder approval.

UK Financial Investments, which manages the government’s stakes in bailed out banks, blocked RBS from paying that amount but allowed its state-backed rival Lloyds Banking Group to do so. Lloyds has returned to profit and the government has begun selling its shares in the bank.

RBS’s Chief Executive Ross McEwan waived his 2014 bonus for 18 months when he took up the role last year to avoid criticism.

RBS also said on Tuesday a commitment to no longer pay out annual bonuses to executive directors had been extended to other top managers.

$1 = 0.5962 British Pounds Editing by David Evans

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