RBS Building London UK
RBS Building in London Reuters

Sir George Mathewson, former chairman of the Royal Bank of Scotland (RBS) that faced severe criticism over its big staff bonuses, said he is not a supporter of the reward system giving away very large bonuses.

"I've never been an advocate of a rewards system that's based on very large bonuses," he told BBC Radio 4 Today.

"But I do regret that politics has interfered with (RBS) management's wishes (re. bonuses)."


The comments come as it was revealed that the UK government had blocked RBS' s move to boost bonuses to twice the value of executive salaries.

According to RBS's annual report, UK Financial Investments that manages the government's 81% stake in the bank is opposed to a 2:1 variable-to-fixed pay ratio, and therefore it would not propose the bonus structure at its next annual general meeting.

In February, RBS granted staff £576m (€700m, $967) in bonuses for 2013 despite the lender losing £8.2bn over the past year.

RBS is 81% owned by the government and its largest investor is the UKFI with a 63.9% holding. It has to get permission from the government for any remuneration or dividend-related proposals.

Mathewson is known for transforming the RBS from a struggling regional player into a quasi global bank with parallels to Citigroup or HSBC. He was described as "banking's answer to Bruce Springsteen" by the Sunday Herald.

In 1990s, he led a restructuring of RBS's UK operations that included a tightening of credit controls, giving the bank a solid platform for growth. Under his leadership, RBS became the first ever Scottish company to make profits of more than £1bn in 1998.