RBS bows to pressure over chief executive’s remuneration
by Gill Montia
Royal Bank of Scotland (RBS) chief executive, Stephen Hester, has agreed to moderate his £9.6 million remuneration package, set up in the past fortnight.
Mr Hester will delay taking part of his bonus in RBS shares until 2014, an extension of two years.
The £3.4 million element of the package is linked to share price targets and dependent on RBS shares reaching 70p; currently, shares in the 70% state-owned bank are trading at under 40p.
Public outrage at the size of Mr Hester’s award has apparently led RBS to recognise that the package should reflect a stronger link to the bank’s performance, although the original deal had the blessing of UK Financial Investments, the body that manages taxpayers’ interests in bailed-out UK financial institutions.
Mr Hester was appointed to the board of RBS at the height of the financial crisis last October, becoming group chief executive in November when he moved from British Land.
He has previously held the post of chief operating officer at Abbey National plus positions with Credit Suisse First Boston including chief financial officer, head of fixed income and co-head of European investment banking.
According to reports, Mr Hester’s original RBS remuneration package was broadly in line with that of some other UK banks.
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