Royal Bank of Scotland boss rejects £1m bonus
Baku, January 30 (AZERTAC). Royal Bank of Scotland chief executive Stephen Hester has turned down his controversial bonus, worth nearly £1m.
BBC business editor Robert Peston said Mr Hester would renounce the £963,000 shares-only payment after succumbing to "enormous political pressure".
Chancellor George Osborne said it was a "sensible and welcome" decision that now let Mr. Hester focus on getting back billions of pounds for the taxpayer.
Labour leader Ed Miliband said the RBS boss had "done the right thing".
Earlier, Labour said it would force a vote on the issue after Prime Minister David Cameron refused to block the bonus from the mostly publicly-owned bank.
Robert Peston said the board felt Mr Hester had earned the bonus for the way he had made RBS a less risky organization.
But when it looked as though MPs were going to vote against it, the general consensus amongst the directors was that the "game was up", he added.
Earlier this month, RBS announced it would cut 3,500 jobs from its global banking division.
The cuts will mean RBS has removed 11,000 employees from its staff, almost halving its 2007, pre-credit crunch headcount of 24,000.
Shares in the bank have fallen 36% in the last year, falling 2% on Monday`s open.
Shadow business secretary Chuka Umunna said Mr. Hester was already being adequately rewarded for his performance.
"He received £1.2m a year - that`s 46 times the average salary of an average employee in this country - to do that job," he said.
"Usually you receive a bonus when you`ve done something above and beyond - exceptional, extraordinary."
Mr Hester was appointed chief executive at the end of 2008 to replace Sir Fred Goodwin, after the bank had to be bailed out by the government, which now owns 82% of it.
RBS chairman Sir Philip Hampton had already announced that he would waive his payout.
He had been on course to claim 5.17 million RBS shares in February, but it is thought he told the bank`s remuneration committee it would "not be appropriate" to take a £1.4m payout.
Robert Peston said RBS`s directors now recognize it would have been better to delay Mr Hester`s bonus decision until after it was revealed how much Barclays chief executive Bob Diamond received.
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