For a moment over the weekend, it looked as if RBS were going to throw all caution to the wind and pay the kind of money needed to unequivocally retain its key staff and prevent another Singapore-style walkout.

However, no sooner had The Times suggested the average RBS-er was on track for 240k, with senior staff set to receive 1-5m, than a ruckus broke out.

Lord Myners promptly said large bonuses would be blocked, and RBS denied all knowledge of plans to pay them, saying
the rumours were “without foundation.”

As a dry run for this year’s bonus season, this doesn’t augur well. Despite losing as many as 700 people from its markets business earlier this year, RBS still has pockets of excellence in areas like rates and FX trading. Many of its top performers are said to be miffed at the large guarantees paid to the likes of Antonio Polverino, which are expected to deplete the bonus pool for everyone else.

Certainty around pay is needed as a result. In the context of the bank’s performance, a 240k per head payout may not be excessive (100k was accrued in the first half), particularly as a high proportion of it will probably be paid in the bank’s deferred subordinated debt and subject to clawbacks.

If top performers at RBS are faced with the prospect of earning substantially less, they are unlikely to stick around into next year – particularly if they work in areas like rates, where demand for their skills is strong. Expect a few team moves in 2010.