EXECUTIVES at state-backed Royal Bank of Scotland (RBS) have been awarded fixed share allowances worth £3.2 million for the six months to December 31.

The total, calculated before tax, includes an allowance worth nearly £490,000 for the bank’s chief executive Ross McEwan. However the bank said Mr McEwan, who is entitled to receive a fixed share allowance equal to his basic annual salary of £1 million, will give 30,664 of his shares, worth around £85,000, to charity. The New Zealander, who has led the Edinburgh-based lender since 2013, previously transferred all of his fixed share allowance for 2015, and half of his allowance for 2016, to charity.

Fixed share allowances were introduced by banks in 2014 following the introduction of European Union rules, which capped the amount of bonuses they could pay leading executives to 200 per cent of their salaries. The move allowed the banks to effectively get round the cap by paying executives a higher proportion of earnings as fixed pay, as opposed to variable pay or bonuses.

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In the case of Royal Bank of Scotland, which remains 71 per cent owned by UK taxpayers, the UK Government ruled that the chief executive is entitled to receive fixed share allowances equal to 100 per cent of their basic salary.

Mr McEwan took home a total pay package worth nearly £3.5m in 2016, a year which saw the bank report a loss of £7 billion. His pay included a long-term incentive award of around £1m. The bank, bailed out by taxpayers at the height of the financial crisis, stopped paying annual bonuses when the EU bonus cap was introduced in 2014.