28 Jan 2012

RBS chairman turns down £1.4m share bonus

One day after RBS chief executive Stephen Hester is awarded a £930,00 bonus, it emerges Sir Philip Hampton, the bank’s chairman, is to turn down a share-based bonus worth £1.4m.

A spokesman for the bank, in which the British government holds a majority stake, said: “Sir Philip Hampton will not receive the 5.17 million shares he was awarded in 2009 when he joined RBS.”

Sir Philip is said to have told the bank’s remuneration committee it would not be appropriate for him to take the shares to which he is entitled.

In 2010 Philip Hampton received a basic salary of £750,000, with no extra performance bonus or additional benefits.

‘Up to Mr Hester’

Today’s announcement comes after the controversy surrounding the decision to award a £963,000 bonus to Stephen Hester, the bank’s chief executive, on top of his £1.2m salary.

Mr Hester has faced calls from politicians, unions and the public to turn down the award.

But Sir Philip defended the bonus to his colleague, saying it reflected that the turnaround of the bank was “progressing well” under Mr Hester, who had “played no part” in the collapse of RBS.

The RBS chairman has also acknowledged he is “aware of the difficulties in trying to reconcile the competing objectives of all our stakeholders”, especially on pay.

Read more: Are bankers worth their weight in gold?

‘It’s his decision’

The prime minister, David Cameron, today insisted it was up to Mr Hester to decide whether to give up his bonus.

“It’s obviously his decision,” he said. “My decision is to make sure the team at RBS get on with the job of turning the bank and, and we made our views very clear on the bonus and that’s why it was cut in half compared to last year.”

Mr Cameron also warned that installing a new top team at the failed bank could be costly.

“We do have to bear in mind that the alternatives to what’s happening now could be even more expensive if you had a whole new team coming into RBS,” he said.

Results season

Britain’s other big banks will 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 will forgo his annual bonus of up to £2.4m following his two-month leave of absence.

Elsewhere, reports have suggested Barclays boss Bob Diamond could receive a £10m payout in the forthcoming bonus season.