The taxpayer-owned giant intends to make awards that will allow top bankers to double their base salaries, according to reports in the Sunday Times and Mail on Sunday at the weekend.
These said the awards would not carry performance conditions.
The allowance plans may generate renewed controversy about pay levels at banks following a week in which the subject has been in the headlines again.
On Friday Edinburgh-based Royal Bank scrapped plans to seek permission to pay staff bonuses worth double their fixed pay after the government said it would oppose the move.
Loss-making RBS said that UK Financial Investments, which manages Britain's 81% stake, told the bank it would vote against the proposal at the lender's annual meeting in June.
"In these circumstances the board expects such a resolution would fail and will therefore not be brought to the AGM," the bank said on Friday.
Led by chief executive Ross McEwan, Royal Bank warned it now faces a "commercial and prudential risk" as it tries to operate within a 1:1 fixed to variable pay ratio.
It said: "The board believes the best commercial solution for RBS is to have the flexibility on variable to fixed pay ratios that is now emerging as the sector norm."
The bank's annual report published on Friday showed it paid 75 people £1 million or more in 2013.
Royal Bank is also reported to be planning to try to win backing from private equity investors for a scheme to combine its loss-making Ulster Bank operation with rivals including Allied Irish Bank and Permanent TSB.
This might allow the bank to cut costs while boosting its competitive edge.
Meanwhile the Sunday Herald reported that 4000 current and former employees of Royal Bank group have joined the action group that is suing the group over what it alleges was a misleading £12.3bn rights issue in 2008.
The group has 12,000 members. The deadline for applications is 1 May.
Royal Bank of Scotland declined to comment.
On Thursday Standard Life led a revolt over executive pay levels at Barclays Bank, which hiked bonus payments for last year although it suffered a sharp fall in profits.
The Edinburgh-based giant voted against Barclays' Remuneration Report citing the bank's decision to pay out £2.4bn in bonuses for 2013 - up 10 per cent on 2012 despite a one-third drop in profit .
Around 24 per cent of votes cast at Barclays' AGM opposed the remuneration report.
Some 1.5 billion votes, representing about 9% of the shares in issue, were withheld.