$1.5m bonus for RBS boss sparks row
London, January 28, 2012
The awarding of a reduced bonus just short of £1 million to the boss of state-rescued Royal Bank of Scotland (RBS) has sparked heavy criticism as Britain teeters on the brink of recession.
RBS announced that boss Stephen Hester had been awarded an annual bonus of £963,000 ($1.5 million).
But the fact that it was less than half the £2m he was given a year earlier failed to dent criticism of the payout.
The award was underneath the £1m figure reportedly sought by Prime Minister David Cameron and because the payout is in shares and deferred until 2014, the value could go either up or down.
However, with the state-controlled bank struggling to recover, legislators and other key officials hit out at Hester's award, which comes as Britain sits on the brink of recession amid painful austerity cuts from the coalition government.
Trade union leaders also blasted the bonus, coming after RBS has slashed tens of thousands of jobs since its rescue at the height of the global financial crisis in 2008. The lender is now 82 per cent owned by the state.
Opposition Labour party leader Ed Miliband said Cameron should have stopped the bonus.
"This is a terrible failure of leadership by the prime minister. He's been promising for months action against excessive bonuses, executive pay, and now he's nodded through a million-pound bonus," Miliband told Sky News.
"He must now explain, not least to the British people, why he has allowed this to happen."
RBS defended the size of the bonus, which will be paid on top of Hester's annual salary of £1.2m.
According to the BBC, the government agreed to the bonus, fearing that a veto would have triggered the resignation of Hester and much of the RBS board.
RBS has slashed almost 34,000 jobs since the bailout in October 2008.
Lloyds Banking Group, which is 41pc owned by the state after it too received a bailout, revealed that its boss Antonio Horta-Osorio had declined his 2011 annual bonus.-Reuters