RBS is reported to have lured the Merrill Lynch bond trader on a one-year contract worth more than £7m, where he had been paid around £20m.
Yesterday it would only say it does not discuss “specifics about individuals”.
Merrill Lynch itself was forced to sell to its more conservative rival, Bank of America, after nearly collapsing last year leading to much internal strife and the departure of many senior bankers.
Mr Polverino will be joined by the Bank of New York Mellon’s Bruce Van Saun, who takes the reigns next month as RBS’s new finance director on a package estimated to be in excess of £5m.
The deals are two of the most lucrative offered by the bank in a bid to rebuild the business after it had to be rescued last October with £20bn bail-out by the taxpayers. The public now owns a 70% stake in the company.
A spokesman for the Scottish Government said: “Financial institutions need to be mindful of public opinion on pay and rewards and the large amounts of taxpayers money which has now been invested.
“While it is in everyone’s interests that RBS performs well going forward, the Scottish Government will look to UK regulatory authorities to ensure that there is no further reward for failure.”
LibDem treasury spokesman, Vince Cable, questioned the wisdom of the move in the wake of end-of-year accounts showing RBS had only just scraped into the black with pre-tax profits of £15m.
He said: “If these reports are true, then RBS have now spent almost all of their profits for the last six months on a bonus for the chief executive and a golden hello.”
Susie Squire, political director at the TaxPayers’ Alliance said the payouts were “a scandal”. She added: “Hard-working taxpayers have had no choice but to surrender billions to RBS, only to see their money splashed around on sky-high pay and swanky offices.
“When taxpayers’ money has come out of that bank they can pay their staff whatever they wish, but until that time UKFI should do more to stop this sort of profligacy.”
RBS claimed to impose strict “no payment for failure” clauses on pay packages, such as deferring payment and allowing potential future clawback of bonus payments.
But it has also recently confirmed agreeing to guarantee bonuses to certain key individuals – a move frowned upon following the financial meltdown.
A spokesman for RBS said: “We reserve the right to use the tools we need to attract and retain the best.”
Phil Sharp, managing director of financial sector headhunters, Executive Consultants, described Mr Polverino’s reputed deal as “an unusually high amount”.
However, he said it may be value for money in the long-run. “I guess it really boils down to the revenue they expect he’s going to bring into the organisation … You’ve got to look at it in very pragmatic terms: if paying him £7m achieves an extra £100m in revenue for the taxpayer then it’s money well-spent.”
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