Royal Bank of Scotland to pay top executives £28m bonuses

Royal Bank of Scotland's chief executive Stephen Hester is in line to earn a total of £7.7m for 2010, the nationalised bank revealed last night.

Mr Hester is the top earner out of nine RBS executives who are in line to share up to £28m of bonuses share-plan awards, at current prices, on top of their salaries.

The decision to pay out tens of millions to the RBS executives will fuel anger about top bankers' pay, after Barclays announced it has awarded its chief executive Bob Diamond a £6.5m bonus for 2010.

The banks had agreed to exercise restraint on bonuses in a deal with the Government that was meant to draw a line under outrage over their rewards.

RBS said it had set aside 10.1 million of its own shares, worth £4.5m at current prices, for Mr Hester under the bank's long-term incentive plan (LTIP). The award is on top of Mr Hester's £1.2m salary and £2.04m bonus already announced for last year.

The LTIP shares and Mr Hester's all-share bonus will pay out over the next three years, according to his performance against targets.

Mr Hester's windfall could be much less than the £4.5m figure if he does not meet his targets but could be higher if he meets all his targets and the share price increases substantially.

The next biggest earner after Mr Hester is chief financial officer Bruce van Saun, whose bonus and shares are worth £4.2m.

The US chief Ellen Alemany's equivalent payout is £3.6m.

Last year, Mr Hester turned down an annual bonus, but he received 8.5 million shares under the LTIP plan. He has admitted that his own mother thinks he is overpaid, but he has stressed that to get RBS back on its feet, it has to pay enough to attract and keep the best people.

An RBS spokesman said: "These awards follow exhaustive consultation with our shareholders and we believe they appropriately balance demonstrating restraint while remaining fully supportive of our leadership through the RBS turnaround plan."

RBS made a loss of more than £1bn last year and is 83 per cent-owned by taxpayers after the Government bailout saved it from collapse in October 2008.

The announcement on executive pay is normally included in the company's annual report, which RBS will publish next week. It may reveal more rewards for some fo the top executives under a scheme to pay them in bonds. The bank rushed out the figures yesterday because it was required to do so under Stock Exchange rules.

Mr Hester replaced Sir Fred Goodwin after the 2008 bailout and has set about dismantling his predecessor's empire.

Targets for his share payout comprise shareholder returns, economic profit, balance-sheet strength and progress against the bank's massive sell-off of assets and businesses.

RBS shares rose 1.4 per cent to 44.38p yesterday, below the average price paid by the Government for the shares it bought when it shored up the bank's finances.

Life and Style
A teenager boy wakes up.
life
Life and Style
Researchers have said it could take only two questions to identify a problem with alcohol
food + drink
Arts and Entertainment
Critics say Kipling showed loathing for India's primitive villagers in The Jungle Book
filmChristopher Walken, Bill Murray, Scarlett Johanssen Idris Elba, Andy Serkis, Benedict Cumberbatch, Cate Blanchett and Christian Bale
Life and Style
Playing to win: for Tanith Carey, pictured with Lily, right, and Clio, even simple games had to have an educational purpose
lifeTanith Carey explains what made her take her foot off the gas
PROMOTED VIDEO
Life and Style
tech
Arts and Entertainment
A still from Duncan Campbell's hour-long film 'It for Others'
Turner Prize 2014
Life and Style
food + drink
News
i100
Arts and Entertainment
Tony Hadley in a scene from ‘Soul Boys Of The Western World’
musicSpandau Ballet are back together - on stage and screen
Arts and Entertainment
From left to right: Ed Stoppard as Brian Epstein, Sheridan Smith as Cilla Black and Elliott Cowan as George Martin in 'Cilla'
tvCilla review: A poignant ending to mini-series
News
i100
Life and Style
Bearing up: Sebastian Flyte with his teddy Aloysius in Brideshead Revisited
lifePhilippa Perry explains why a third of students take a bear to uni
Arts and Entertainment
Sir Alan Sugar appearing in a shot from Apprentice which was used in a Cassette Boy mashup
artsA judge will rule if pieces are funny enough to be classed as parodies
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

SQL Developer (Stored Procedures) - Hertfordshire/Middlesex

£300 - £330 per day: Ashdown Group: SQL Developer (Stored Procedures) Watford...

Day In a Page

Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?
Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

Homegrown ballerina is on the rise

Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
Education, eduction, education? Our growing fascination with what really goes on in school

Education, education, education

TV documentaries filmed in classrooms are now a genre in their own right
It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

It’s perfectly reasonable to negotiate with villains like Isis

So why don’t we do it and save some lives?
This man just ran a marathon in under 2 hours 3 minutes. Is a 2-hour race in sight?

Is a sub-2-hour race now within sight?

Dennis Kimetto breaks marathon record
We shall not be moved, say Stratford's single parents fighting eviction

Inside the E15 'occupation'

We shall not be moved, say Stratford single parents
Air strikes alone will fail to stop Isis

Air strikes alone will fail to stop Isis

Talks between all touched by the crisis in Syria and Iraq can achieve as much as the Tornadoes, says Patrick Cockburn
Nadhim Zahawi: From a refugee on welfare to the heart of No 10

Nadhim Zahawi: From a refugee on welfare to the heart of No 10

The Tory MP speaks for the first time about the devastating effect of his father's bankruptcy
Witches: A history of misogyny

Witches: A history of misogyny

The sexist abuse that haunts modern life is nothing new: women have been 'trolled' in art for 500 years
Shona Rhimes interview: Meet the most powerful woman in US television

Meet the most powerful woman in US television

Writer and producer of shows like Grey's Anatomy, Shonda Rhimes now has her own evening of primetime TV – but she’s taking it in her stride
'Before They Pass Away': Endangered communities photographed 'like Kate Moss'

Endangered communities photographed 'like Kate Moss'

Jimmy Nelson travelled the world to photograph 35 threatened tribes in an unashamedly glamorous style