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British bank boss turns down disputed bonus

30 january 2012, 17:09
0
©AFP
©AFP
Stephen Hester, the chief executive of Britain's state-rescued Royal Bank of Scotland, will not take his hotly-disputed bonus of shares worth close to £1 million, AFP reports citing RBS.

It was announced Thursday that Hester would receive a £963,000 ($1.5 million, 1.15 million euro) bonus this year, on top of his £1.2 million salary.

The announcement -- amid government calls for pay restraint during the continuing economic gloom -- sparked outrage from trade unions and the opposition Labour Party.

The fact that the sum was less than half the £2 million Hester was given a year earlier failed to dent the criticism.

British taxpayers own 82 percent of RBS since it was bailed out at the height of the global financial crisis in 2008, and since then it has slashed tens of thousands of jobs.

Hester's move was welcomed by finance minister George Osborne.

"This is a sensible and welcome decision that enables Stephen Hester to focus on the very important job he has got to do, namely to get back billions of pounds of taxpayers' money that was put into RBS," the chancellor said.

The announcement came after the opposition Labour Party said it planned to force a parliamentary vote calling for Hester to be stripped of his bonus.

Labour was set to stage a debate the week after next, a party source said, to heap pressure on conservative Prime Minister David Cameron's coalition government in the row over the payout.

Ministers had spent Sunday defending the decision to leave the matter to Hester.

"The judgment we had to make was: should we go further, as many of us would like to, and say, let's have no bonus at all?", said Danny Alexander, chief secretary to the Treasury, on BBC television.

"Have the government taking control directly of RBS, and therefore causing potentially much bigger financial risks to the taxpayer?"

Work and Pensions Secretary Iain Duncan Smith said the government could not interfere with the RBS board and so would have to get rid of the body altogether to strip Hester of his bonus, a move which would cause "chaos".

Labour leader Ed Miliband in a blog challenged the government "to practice what it preaches about the role of shareholders in restraining top pay."

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