New EU rules aim to limit high pay at bailed out banks

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Senior executives at bailed out banks could face drastic reductions in their pay under new EU rules on state aid.

The FT reports Brussels will cap the pay of executives at 15 times the average national salary or 10 times the salary of an average worker at the bank from next month.

The EU has already capped bankers’ bonuses at two times the fixed salary under CRDIV financial stability rules.

Chancellor George Osborne privately opposed the new rules as it makes it more difficult to attract a new Royal Bank of Scotland chief executive to replace Stephen Hester.

The FT calculates that if the pay curbs were imposed in full, senior RBS staff would see their total pay including bonuses and share awards capped at about £471,000 – 15 times the UK national average salary of £31,413.