UK opposition seeks debate on RBS chief's bonus

Sun Jan 29, 2012 4:49pm EST
 
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* CEO could theoretically get 8 mln stg bonus

* Opposition calls for parliament debate, could strain coalition

By Sudip Kar-Gupta and Tim Castle

LONDON (Reuters) - Pressure grew on the chief executive of bailed-out lender Royal Bank of Scotland (RBS.L: Quote) on Sunday to give back a million pound ($1.5 million) bonus as the Labor opposition said it would force a parliamentary debate on the row.

The bonus for RBS CEO Stephen Hester has hit a raw nerve with Britons at a time of austerity when most workers are suffering wage freezes or sub-inflation rises, while the government has said its hands are tied by his contract.

British newspapers calculated that under Hester's contract he could be in line in future for a bonus eight times as large as the deal which has stirred the latest row.

A Labor source said the party aimed to hold the debate in early February on one of its allotted "opposition day" sessions in parliament. Labor says the government should use its 83 percent stake in RBS to cancel the bonus awarded by the bank's board last week.

Although the parliamentary debate would not be binding, it will raise the political heat on Conservative Prime Minister David Cameron and his Liberal Democrat coalition partners.

The coalition says that overruling the RBS board would risk destabilising a bank whose balance sheet is as large as Britain's entire economy, and points out that the bonus will be handed out under a contract drawn up when Labor was in power.   Continued...

 
<p>Royal Bank of Scotland (RBS) Chief Executive Stephen Hester speaks to media as he leaves after appearing at a Treasury Select Committee hearing at Parliament in London June 8, 2011. REUTERS/Stefan Wermuth</p>