Bonus for RBS boss sparks debate

Stephen HesterDanny Lawson/PA Wire/Press Association Images

A £963,000 bonus for the boss of a taxpayer-funded bank has been attacked as "out of touch" by Labour, as a government minister claimed he had a public "duty" to refuse it.

Royal Bank of Scotland chief executive Stephen Hester's payout was limited to around 60% of the maximum following intense political pressure.
The senior City figure, who has a salary of £1.2 million, will get 3.6 million shares in the bailed-out financial institution, which is 83% state owned. It is less than half the value of last year's all-shares bonus and comes after Prime Minister David Cameron made clear he expected the bonus to be "a lot less" than in 2011.

Treasury sources said they were pleased at the reduction on the previous bonus and that the Government's view had been "made very clear" over recent weeks. But the Opposition said that the scale of the payout showed the Government was "desperately out of touch" with voters and not serious about reining in executive pay and perks.

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Bonus for RBS boss sparks debate

Concern was also raised by Deputy Prime Minister Nick Clegg's chief political adviser Norman Lamb who said he, and most people, would be "deeply uncomfortable with a bonus of that size".

And his Liberal Democrat colleague Jeremy Browne issued an outspoken appeal to Mr Hester to put the taxpayer before his personal wealth and refuse to take the shares.

The bank chief earned the same in three days as a soldier fighting in Afghanistan did in a year, the Foreign Office Minister told BBC One's Question Time, adding: "I think he should reflect on that."

"He is working for a company which is five sixths owned by us, the taxpayer, and I think he has to think like a public servant, not like someone who's there to line their own pocket," he said. "He needs to think like a public servant who has a duty to his country, not just his own wealth."

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

RBS Group chairman Sir Philip Hampton said the company was "aware of the difficulties in trying to reconcile the competing objectives of all our stakeholders", especially on pay. Defending the award however, he said it reflected that the turnaround of the bank was "progressing well" under Mr Hester, who had "played no part" in its collapse.

© 2012 Press Association
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