Outrage at RBS boss’s bonus payout

The £963,000 worth of shares will be awarded to Hester on top of his £1.2m salary.

It is less than half the value of last year’s all-shares bonus and comes after Prime Minister David Cameron made it clear that he considered a seven-figure sum would be unacceptable.

‘Out of touch’

But it has sparked a wave of criticism by the Opposition who said the scale of the payout shows the government is “desperately out of touch” and is not serious about reining in executive pay.

Liberal Democrat Jeremy Browne called on Mr Hester to put the taxpayer before his personal wealth and refuse the shares.

“Even if there is a contractual opportunity for him to have it, it doesn’t mean he has to accept it. He’s already being paid more than £1m a year.

“His total package now means he gets paid in about three days what a soldier serving in Afghanistan, risking his life, gets in a whole year. I think he should reflect on that,” the Liberal Democrat MP said.

His total package now means he gets paid in about three days what a soldier serving in Afghanistan, risking his life, gets in a whole year. Liberal Democrat Jeremy Browne

He added: “No-one’s forcing him to take this money. He could struggle on with £1.2m.”

Since he joined in November 2008, RBS has cut 33,000 jobs.

Bonus ‘reflects progress’

Sir Philip Hampton, the RBS chairman, defended the package, saying Hester’s bonus “reflects progress in the categories agreed with our shareholders as set out in the remuneration report”. The 3.6m shares are currently worth £963,000 and could rise or fall in value by 2014 when Hester can access them.

“His pay is strongly geared to the recovery of RBS, which he was recruited to turn around, having played no part in its collapse. The priority is to reshape a business that was far too big and far too risky, reducing legacy losses whilst improving performance in the group’s strong core businesses.”

Hampton argued that a “safer and more valuable RBS is in the interests of our customers, shareholders and the UK economy”.

Forgoing bonus payouts

Britain’s biggest banks are expected to unveil their bonus plans next month when they publish their annual results.

Antonio Horta-Osorio, chief executive of part-nationalised Lloyds Banking Group, has announced he would not take his annual bonus of up to £2.4m following a volatile period for the banking giant.

It has been suggested that Barclays boss Bob Diamond could receive a payout of up to £10m in the coming bonus season.