Hester Bonus Rejection Praised By Miliband

The Royal Bank of Scotland chief executive Stephen Hester has been praised after caving to political pressure to turn down his £1 million bonus.

It emerged on Monday morning that Mr Hestor would surrender his payment, after being criticised over his performance at the now publicly owned bank, with Mr Miliband saying he had "done the right thing".

"Labour was right to seek a parliamentary vote on this so that the people's voice could be heard. But the debate about fair executive pay and responsible capitalism is only just beginning. We need a government that will tax bankers bonuses and bring responsibility to the boardroom."

The bailed out bank, whose board is controlled by the taxpayer, announced on Friday morning that Group Chief Executive Stephen Hester would be offered the six figure sum as approved at the Annual General Meeting by 99.2% of shareholders.

The move was strongly criticised by MPs with Labour's Chuka Umunna accusing the Government of failing to rein in excessive bonuses.

“People will not be able to understand why, at a time when they are facing the biggest squeeze on their incomes in a generation, the Prime Minister has failed to act despite his promises to do so."

RBS said its Board had decided to allocate Stephen Hester the annual performance award of 3.6 million shares from the Share Bank award set aside for him in 2011. That figure reached some £963,000 based on the closing price on Wednesday when the decision was taken.

"The award will be made entirely in shares that are deferred and subject to holding conditions that mean that their full value cannot be received until late 2014," the bank said. The spokesman added: "Only then can their tangible value be established. This ensures complete alignment of the Chief Executive's interests with those of our shareholders."

(DW)