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A Royal Bank of Scotland executive has potentially gained £11 million from a share option package he was awarded only last month.
John Hourican was promoted to chief executive of the nationalised bank's global markets and banking division at the end of last year.
In April he was given a share and option package worth £6 million, since when then the bank's share price has soared from 28.2p to 46.1p and increased the potential value of his reward to £11 million.
The shares and option rewards depend on Mr Hourican hitting demanding performance hurdles over the next three years and he is able to take up the package at any time until 2019.
An RBS spokesman said: “All share awards are entirely hypothetical until and unless he succeeds and RBS succeeds in its core mission. He won't receive a penny if he doesn't deliver for the group.”
RBS is six months into a planned fiveyear turnaround which it hopes will allow the Government to sell its 70 per cent stake in the bank on the stock market.
Dublin-born Mr Hourican joined RBS in 1997 and in 2007 was given the post of finance director at ABN Amro, the Dutch bank which RBS took over in a hard-fought battle with Barclays.
Mr Hourican, 39, received high praise from Stephen Hester, who took over from disgraced Sir Fred Goodwin as chief executive of RBS. He said: “John Hourican was completely invisible to the outside world and has now been put in as chief executive of global markets and banking, which is our area of biggest business challenge.”
Most of RBS's record £24 billion loss last year came from its global markets and banking division. Mr Hourican took over from flamboyant investment banker Johnny Cameron, who was known for taking risky investment bets with the bank's money.
A colleague said: “Exotic is out at RBS, caution is in. Hourican is the man for that.”
One of Mr Hourican's first tasks in charge of what is essentially the bank's wholesale arm was to cut its staff by 2,700, roughly 15 per cent of the workforce.
He is taking his cue from Mr Hester, who has made it clear he expects the bank, which also owns NatWest, to take a far more cautious view on lending in the future.
Mr Hester has been given a package of 10.4 million free shares, worth almost £5 million at current prices, which he will receive if he succeeds in turning RBS around.
The bank's chief executive also earns a basic salary of £1.2 million a year. Last week RBS said it had lost £857 million in the first three months of this year leading to Mr Hester saying he could not see any “green shoots of recovery”. He also warned that it would “take years not months” for his turnaround plan to work.
Reader views (2)
Your headline suggests he has actually received the money when the quote from the abnk says "He won't receive a penny if he doesn't deliver for the group.” So, you're not correct - some people would call it inflammatory to print a headline that is contrary to actuality.
- Peter Bench, London, 12/05/2009 14:47
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I can't understand why the tax payers had to bail out the banks to start with; they seem to find all the money they want when its going into their own pockets.
In the mean-time, our pockets are being emptied.
- Mickyinlondon, london, 12/05/2009 13:38
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