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| Brown warns banks on bosses pay | |
| (about 1 hour later) | |
| The Prime Minister has insisted there should be "no reward for failure" at banks which have had to be bailed out by the taxpayer. | The Prime Minister has insisted there should be "no reward for failure" at banks which have had to be bailed out by the taxpayer. |
| Gordon Brown was speaking after reports Royal Bank of Scotland is considering awarding large bonuses, despite expectations of huge annual losses. | |
| However Mr Brown stopped short of saying the government would impose a salary cap on rescued banks. | |
| On Wednesday President Obama capped executive pay at rescued US banks. | |
| RBS warned | |
| Earlier, Business Secretary Lord Mandelson sent a direct warning to RBS, saying the bank risks alienating ordinary people if it gave its executives "exorbitant" bonuses. | |
| Responding to a report in The Times newspaper saying RBS was planning to pay millions in bonuses to its senior bankers and traders, Lord Mandelson said: "Please be mindful about how this looks and what public opinion will be." | |
| The recently bailed-out bank said its pay policy had yet to be decided. The banks have got to be sensitive to public opinion and I think they need to think about what is the best way forward Business Secretary Lord Mandelson See RBS share priceObama unveils executive pay cap | |
| RBS told the BBC: "The Board has yet to decide on remuneration policy for the year." | |
| "We have previously announced that the Board will receive no bonuses in 2008 and if there are any bonuses for 2009 they will be paid in shares." | |
| Lord Mandelson added: "Of course you have got to do all you can to recruit the best people and keep the best people in place - there is a huge job on our plates. | |
| "On the other hand the banks have got to be sensitive to public opinion and I think they need to think about what is the best way forward." | |
| No reward | |
| Speaking later at Downing Street, the Prime Minister was keen to stress that top executives at rescued banks had left without severance pay and bonuses. | |
| The new boards would not be receiving any cash bonuses and there would be no dividends for shareholders, he added. | The new boards would not be receiving any cash bonuses and there would be no dividends for shareholders, he added. |
| Mr Brown also said he "strongly agreed" with the approach to executive pay being taken by President Obama. | Mr Brown also said he "strongly agreed" with the approach to executive pay being taken by President Obama. |
| The PM was speaking one day after the US President announced a $500,000 (£355,000) limit on executive pay at US firms that needed fresh government aid. | The PM was speaking one day after the US President announced a $500,000 (£355,000) limit on executive pay at US firms that needed fresh government aid. |
| Wall Street paid $18.4bn (£12.7bn) in bonuses in 2008 and $32.9bn (£22.7bn) in 2007. | Wall Street paid $18.4bn (£12.7bn) in bonuses in 2008 and $32.9bn (£22.7bn) in 2007. |
| However Mr Brown stopped short of saying the government would impose a similar salary cap. | However Mr Brown stopped short of saying the government would impose a similar salary cap. |
| Record loss expected | Record loss expected |
| RBS, which is set to be 70% owned by the government, is due to release its annual earnings results on 26 February. | RBS, which is set to be 70% owned by the government, is due to release its annual earnings results on 26 February. |
| It has already said that it expects to report write-downs of between £7bn and £8bn in 2008. The forecast caused shares in the bank to plunge 67%. | It has already said that it expects to report write-downs of between £7bn and £8bn in 2008. The forecast caused shares in the bank to plunge 67%. |
| Analysts predict it will report a record annual loss for 2008, beating the £15bn loss posted by Vodafone in 2006. | Analysts predict it will report a record annual loss for 2008, beating the £15bn loss posted by Vodafone in 2006. |
| According to The Times newspaper, RBS paid out £1.83bn in remuneration in 2007, most of which is thought to have been in bonuses. | According to The Times newspaper, RBS paid out £1.83bn in remuneration in 2007, most of which is thought to have been in bonuses. |