LONDON (Reuters) - The former boss of state-backed Royal Bank of Scotland’s (RBS.L) 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 (C.N) 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 (JPM.N) CEO Jamie Dimon received about $20 million last year, while the bosses at Citigroup (C.N) and Bank of America (BAC.N) each received about $14 million.
Alemany, who joined the board of U.S. lender CIT (CIT.N) 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.
Editing by David Goodman