RBS chief in line to pick up more bonus millions

Another bumper payout for Stephen Hester despite dive by shares in bailed-out bank

The chief executive of Royal Bank of Scotland is set to pocket another multimillion-pound bonus for a year's work that has seen the share price more than halve.

Details of Stephen Hester's award are still being worked on, but it is clear that the state-owned business intends to see he gets another controversial payment. The Government stepped in to save the collapsing bank in 2008, taking an 84 per cent stake at 50p a share, or £45bn.

The share price has tumbledfrom 49p last February to 20p today, leaving taxpayers heavily underwater. That is likely to prompt fresh questions about why executives are rewarded for their performance long before actual results are delivered.

Mr Hester, brought in to clear up the mess left by the previous chief executive, Sir Fred Goodwin, got a package of £7.7m last year. That prompted anger from small investors at the RBS annual meeting. One accused the directors of having "an inflated sense of their own importance".

Another said bonuses should not be paid until the bank is again handing a dividend to investors, which looks a long way off.

Mr Hester's pay has been defended by his chairman, Sir Philip Hampton, on the basis he was "working like stink" to turn around the bank.

Mr Hester has admitted that even his parents think he is overpaid.

The bank's remuneration committee is due to meet soon to discuss the issue. An RBS spokesman said: "No decision has been made. It is too early to speculate."

The fall in the share price means this year's pay package is likely to be lower than last, but it is still likely to prove politically awkward. David Cameron yesterday announced plans for a clamp-down on executive pay, saying investors should take greater responsibility over the issue. He is open to charges of hypocrisy if the Government allows high levels of pay at companies in which it is the largest shareholder. UKFI, the body that manages the taxpayer's holding on behalf of the Treasury, last year voted in favour of the RBS pay deals.

Meanwhile, there is growing concern in the City at how far the Government may be willing to go in imposing rules on pay. Until now, neither political party has wanted to do so, fearing it would send the wrong message to international companies about Britain's appreciation of entrepreneurs. But with the public anger at banker pay showing no sign of abating, it is possible that genuine reform could come.

Paul Randall, a partner at the law firm Ashurst, said: "It is increasingly clear that the Government is going to legislate further on executive pay, in particular as to disclosure of pay, the composition of remuneration committees and to give shareholders more specific votes on bonuses and termination payments than they have at present."

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Fans hold up a scarf at West Ham vs Liverpool
footballAfter Arsenal's clear victory, focus turns to West Ham vs Liverpool
New Articles
i100... she's just started school
ebooksAn unforgettable anthology of contemporary reportage
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
New Articles
i100... despite rising prices
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam