RBS's retail banking chief is sparing his employer's blushes and will leave for a new job before collecting the final, formidable, tranche of shares he was issued with on his arrival less than three years ago
Golden hellos – big signing-on fees to lure new directors – are generally frowned upon by investors. Companies try to tackle their concerns by issuing new directors with shares that they have to hold on to for three years, for example. Some companies also attach performance criteria to try to make them appear less like free giveaways.
So it was when Royal Bank of Scotland lured the American Brian Hartzer to run its retail banking arm from ANZ bank in Australia.
The stock exchange announcement from August 2009 shows he was handed 4.8m shares, some 1.9m he received between 31 October 2010 and 17 August 2011, but the rest – some 2.8m – are due to "vest" to him on 17 August 2012.
This last batch of shares is subject to "delivery against his divisional performance targets linked to the RBS group strategic plan over a three-year period". Assuming he has met his performance targets, at current prices, those shares are worth around £800,000.
The snag is that Hartzer has resigned and is going back to Australia to take up a top job at Westpac. He is due to leave "during summer 2012" .
He might be tempted then, to wait until 18 August to leave, to ensure he gets his 2.8m shares. But this would have unleashed a fresh round of controversy and it turns out that Hartzer intends to spare his employer any further blushes and leave before then. Westpac – which is yet to publish any pay deal for its new recruit – may end up having to buy him out of a signing-on package that bought him out of his new employer's long-standing rival, ANZ.