Will RBS hike chief’s pay in pension row?

bAiLeD-oUt Royal bank of scotland could hike the salary of new boss Alison Rose to offset a £250,000 cut to her pension payments.

Rbs is expected to shortly confirm the promotion of 49year-old Rose, who is chief executive Ross Mcewan’s deputy in the Natwest owner’s retail banking arm.

she is expected to be given a less generous pension package than Mcewan, but could see other elements of her pay boosted to make up for it.

Mcewan gets a salary of £1m plus a further £1m in shares each year. He also pockets £350,000 towards a pension – equal to 35pc of his salary, which is far higher than what is given to ordinary staff.

the retirement payments have triggered an outcry and Rbs has pledged to trim them back for his replacement.

Rose is expected to get 10pc pension contributions, which would equal £100,000 if she was also on a salary of £1m, meaning she would get £250,000 a year less than Mcewan in fixed pay overall. However, it is understood the pay-setting committee at Rbs could hike Rose’s base salary to offset this cut. sources said Rbs already pays its bosses less than rival bank chiefs, and the lender may be keen to avoid falling further behind.

Like Mcewan, Rose will be entitled to further payments on top, such as bonuses, a car allowance and insurance.

the Durham Universityeducated banker has long been seen as the frontrunner to take charge of Rbs after Mcewan’s departure. she has reportedly seen off competition from the likes of ian stuart, head of HsbC’s UK retail arm, and her appointment is expected to be announced within weeks.

Rose will be tasked with continuing the turnaround of the lender. Rbs was rescued with £46bn of taxpayers’ money after years of mismanagement under notorious boss fred ‘the shred’ Goodwin. the treasury still owns a 62.4pc stake in Rbs.

Mcewan has dragged the bank back into profit after years of multi-billion-pound losses, and the lender is once again starting to ramp up dividend payments.

However, it has shut more than 1,400 branches in the past decade as part of cutbacks to boost profits. Rbs declined to comment last night.