RBS chief waives bonus after UK political storm

Sun Jan 29, 2012 7:37pm EST
 
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By Sudip Kar-Gupta and Tim Castle

LONDON (Reuters) - The chief executive of Royal Bank of Scotland (RBS.L: Quote) has decided to waive a bonus worth almost a million pounds ($1.6 million), the bank said on Sunday, after the handout angered Britons bearing the brunt of government austerity measures.

A spokesman for the partly state-owned bank said CEO Stephen Hester would no longer be taking the bonus, which was awarded at a time when most British workers are suffering wage freezes or sub-inflation rises.

"He's waived the bonus," said the spokesman for RBS, which is 83 percent owned by the British government following a state bailout during the 2008 credit crisis.

Hester had been due for the stock bonus, worth roughly 998,640 pounds based on Friday's closing price of RBS shares, on top of his basic salary of 1.2 million pounds. His decision followed a similar move by RBS Chairman Philip Hampton.

The deal had provoked a row across Britain's political spectrum, with the opposition Labor Party leading the attack.

The Liberal Democrat party, junior partner in the coalition government, also criticized the planned payment and even some members of Prime Minister David Cameron's Conservatives joined the assault.

RBS made its announcement shortly after Labor stepped up the pressure by saying it would force a parliamentary debate in which it would have called on the government to use its 83 percent stake in RBS to cancel Hester's bonus.

Salaries at RBS and Lloyds (LLOY.L: Quote) are particularly controversial as both banks were bailed out with 66 billion pounds of taxpayers' money during the crisis. The British government owns 40 percent of Lloyds, along with its RBS stake.   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>