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Robert Peston
Business editor
Pressure on RBS to announce slashed Hester bonus
Mr Hester was appointed in 2009
Government pressure is building on Royal Bank of Scotland's board to announce that chief executive Stephen Hester is to receive a significantly reduced bonus.
I am hearing that the Treasury will inform the company that it believes Mr Hester should receive less than half the bonus of just over £2m that he was awarded last year. So that would be a bonus of less than £1m.
However, when I spoke to a Treasury official he said it would be inappropriate to reveal the government's negotiating position.
The board of the bank, led by the chairman Sir Philip Hampton, are adamant that Mr Hester deserves a bonus, for the way he has significantly reduced the risks taken by the organisation and made it less vulnerable to external shocks (such as a potential meltdown of the eurozone).
RBS's remuneration committee is meeting tomorrow. I am told that the committee is yet to have received formal representations from the Treasury.
The issue of Mr Hester's bonus is bound to be raised with the prime minister tomorrow by the Labour leader, Ed Miliband.
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Comment number 1.
Caribbeanwind24th January 2012 - 20:09
The board of the bank, led by the chairman Sir Philip Hampton, are adamant that Mr Hester deserves a bonus, for the way he has significantly reduced the risks taken by the organisation and made it less vulnerable to external shocks (such as a potential meltdown of the eurozone).
So let me get this right, he deserves a bonus for doing his job? So many other millions do their job without a bonus!!
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Comment number 2.
zipperty24th January 2012 - 20:10
If his bonus is halved it will be interesting to see if he will leave in a huff - as we are told many in the City will do if their remuneration is reigned in
If he doesn't go, then perhaps the experiment can be spread to other undeserved remuneration packages
Perhaps even primary legislation to support it
Remuneration linked by % to company performance
It won't happen but it is nice to dream
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Comment number 3.
TheTurk24th January 2012 - 20:10
So a little under one million for just doing his job is meant to make us feel better?
Hardly.
The crazy thing is, we are all so used to the 'fat cat' culture, it seems absurd to suggest he shouldn't get a bonus at all; although this is what should happen.
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Comment number 4.
Voter7924th January 2012 - 20:12
Ultimately, as tax payers it is all of our interests for RBS to do well. It wont do that without top staff and, at least to my knowledge, no respected commentators would dispute that Mr Hester is anything other than a CEO of the highest calibre. For certain the pay of bank CEOs is huge, as it is for footballers for example, but I for one want my investment in RBS managed by a top tier CEO.
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Comment number 5.
presterjohn24th January 2012 - 20:15
I've been doing a pretty good job too this past year but, tell you what, I'll settle for just half a million bonus, lol.
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Comments 5 of 164