RBS chief Hester in bonus storm

Published:  27 Jan at 6 PM

A £963,000 bonus of shares awarded to RBS boss Stephen Hester was today strongly criticised.

As reported by BBC News, Liberal Democrat minister Jeremy Browne commented that Hester is "a public servant" that should turn down his bonus while Unite branded the news "disgusting". The main opposition party, Labour, said that government pledges to stem executive pay have been "utterly worthless".

The Royal Bank of Scotland bank is 82 per cent owned by the UK taxpayer and the firm which is running it for the Coalition said that the bonus reflected Hester's work towards the restructuring of RBS. Chuka Umunna, the shadow business secretary, told the BBC of how he wouldn't have paid Hester any bonus at all, explaining that ministers have insisted that shareholders play an active role in preventing excess whenever it is come across.

Umunna continued that RBS is a publicly owned institution that the average man in the street has no control of. Robert Peston, the BBC's business editor said that the government paid Hester's bonus due to there being a risk that he would leave his post. The Cranfield School of Management's Dr Ruth Bender defended Hester's bonus and said that it is reasonable as the boss needs to feel as though he is being appreciated for doing such a demanding job very well.

UK Financial Investments said that the bonus, made even more controversial considering that it comes on top of Hester's £1.2m salary, is reflective of the significant contributions that he has made towards restructuring RBS throughout 2011.