RBS IT chief Simon McNamara gets £1.75m share package

The Royal Bank of Scotland (RBS) has awarded its group chief administrative officer, Simon McNamara, who is responsible for IT at the company, a share package worth up to £1.75 million.

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The Royal Bank of Scotland (RBS) has awarded its group chief administrative officer, Simon McNamara, who is responsible for IT at the company, a share package worth up to £1.75 million.

The share deal is tied to McNamara’s and the bank’s performance over the next three years, and the value is based on the market price per share on the date of the award, 7 March.

RBS, which is 81 percent owned by the taxpayer, last month announced it would reduce its technology platforms by 50 percent in a bid to lower costs by £1.1 billion in IT and operations. The bank also wants to improve the resilience of its systems, after significant problems with its legacy IT that has led to a number of high profile outages, most notably an incident in the summer of 2012 which resulted in the launch of an investigation by the Financial Conduct Authority (FCA).

Under the deal, McNamara has been given a maximum of 533,863 shares that will be eligible to vest (that he can take action with) on 7 March 2017 “subject to the achievement of performance conditions”. The market price per share at the time of the award was £3.278, which puts the value of the package at last week’s rate at £1.75 million. The total value of the shares in three years’ time could be higher or lower depending on the share price at the time of vesting.

Furthermore, “clawback provisions”, which is where the shares can be taken back by the bank if McNamara or the company does not meet their targets, also apply.

McNamara is one of 11 directors who received a share package linked to performance, and was the recipient of the second highest amount behind the chief executive Ross McEwan, who was given 915,193 shares worth up to £3 million, according to an SEC investor filing.

The shares have been awarded under RBS’s Long Term Incentive Plan (LTIP), which is part of a trend to award pay that is linked to performance and the achievement of targets, rather than large lump sum salaries and bonuses.

A recent Deloitte report on remuneration in FTSE 100 companies revealed that two-thirds of bonus plans were now based on the employer’s key performance indicators, and increasingly (62 percent last year) companies now require executive directors to hold shares with a value of more than one times salary.

Meanwhile, from 2015, EU regulations will require RBS to cap bonuses at 200 percent of annual salary.

McNamara joined RBS in September 2013 from Standard Chartered Bank Consumer Bank, where he was CIO since 2008. He has also been CIO at Westpac Bank and Deutsche Bank.

His basic salary at RBS has not yet been revealed, as he joined the bank before its annual report, and the information will not be provided until this year’s remuneration report. The release date for this report has not yet been decided.

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