Calls for Hester to waive RBS bonus
Liberal Democrat foreign office minister Jeremy Browne has called for Royal Bank of Scotland chief executive Stephen Hester to turn down the £963,000 bonus he has been awarded.
Following the announcement last night that Hester (pictured) would receive a bonus of almost a £1m in shares, Browne told the BBC’s Question Time: “There is a question of honour. Even if there is a contractual opportunity for him to have a bonus it does not mean he has to accept it.”
Browne also pointed out that Hester was being paid more in three days than a soldier serving in Afghanistan received in a year.
Browne added: “He should reflect on that. He is effectively a public servant in a bank which is almost completely owned by us the taxpayers. He needs to think like a public servant who has a duty to his country, not just his own wealth.”
The Government owns an 82 per cent stake in RBS, which has announced thousands of job cuts while recording a £2bn profit in the three months to September.
UK Financial Investments, which manages the Government’s banking stakes, says: “As the largest shareholder in RBS, we have worked closely with the board to ensure that pay is aligned with the interests of shareholders and properly rewards long-term performance.
“Stephen Hester’s pay reflects the significant contribution he has made towards rebuilding RBS in 2011.”
News of the bonus comes just three days after Business Secretary Vince Cable announced plans to curb executive pay including giving shareholders a binding vote on executive pay packages and a requirement that firms “claw back” bonuses that are later shown not to be merited.
Prime Minister David Cameron has pledged to act to stop state-owned bank executives receiving large bonuses.
Labour’s Shadow Business Secretary Chuka Umunna told BBC’s Today programme this morning as the bonus is paid in shares it could end up being worth more than £1m.
He said Labour would not have paid Hester any bonus and rejected Government claims it could not intervene in the payment because of contractual agreements struck while Labour was in power.
He said: “The fact this was confirmed by RBS shows this is decided on a rolling annual basis.”