Anger over RBS bonus payout January 2012
Posted date: 27 January 2012
Anger is mounting after Stephen Hester, Chief Executive of the Royal Bank of Scotland (RBS), was awarded nearly £1 million in shares for his performance in 2011.
Remuneration at the bank, which is 83 per cent owned by the taxpayer, has come under close scrutiny from the public and Government alike. This culminated in calls from the Prime Minister that any bonus should not exceed £1 million.
RBS stressed that the shares allotted to Hester are deferred and subject to holding conditions until 2014. This ensures that the Chief Executive’s and shareholder’s interests are aligned.
Sir Philip Hampton, RBS Group Chairman, said: “His [Hester] pay is strongly geared to the recovery of RBS, which he was recruited to turn around, having played no part in its collapse.”
Although Hester has only been allocated 60 per cent of the potential reward anger at the news has continued to grow.
Chuka Ummuna, Shadow Business Secretary, told the Guardian that people will be “flabbergasted” that nothing has been done to prevent the payout. He argued that in the same circumstances he would not have given Hester any bonus.
The move comes after Vince Cable’s announced changes to executive pay. He has put forward a four-pronged plan to provide greater transparency, more shareholder power and diversity on boards, and calls for best practice.
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