Global Financial Strategy

Search the site   >>Advanced search
First for financial regulatory news and views
HOME   |   REGISTER   |   SUBSCRIBE   |   NEWS   |   ANALYSIS   |   INTERVIEWS & FEATURES   |   EVENTS   |   MUTTERS   |   JOBS   |   MY ACCOUNT
EUROPE   |    US & CANADA   |    ASIA PACIFIC   |    MIDDLE EAST & AFRICA   |    LATIN AMERICA & CARIBBEAN   |    OFFSHORE   |    SINGAPORE   |    HONG KONG
TRADING   |    CASINO MARKET   |    BANKING   |    INSURANCE   |    FINANCIAL REPORTING   |    TAXATION   |    MACROECONOMIC   |    PROFILES   |   CONTACT   |   
  • MF Global spoke of 'strong' finances
  • EC: No corp gov powers for ESAs
  • FSA appoints senior investment bank adviser
  • GFS has now closed
  • Czechs join UK on fiscal compact sidelines
  • Davos stalemate on EU's IMF funds
  • Tucker: Resolution regime 'top priority'
  • Saudi Arabia increases central bank role
  • FSB urges Canada for one securities regulator
  • CFTC set for committee to scrutinise HFT
  • Fitch downgrades Belgian banks
  • What corruption really costs
  • UK FSA pushes for Mifid II rethink on OTCs
  • Shanghai boosts global financial status
  • Canada aligns credit rating rules with EU
  • Bowles blasts lack of women at ECB
  • Sarkozy to introduce French FTT in August
  • Barnier warns on further bonus reforms
GFS LinkedIn
GFS Facebook
GFS Twitter
GFS RSS feed
You must be logged in to use this function.


RBS chief rejects bonus after outcry

Monday 30 January 2012 – by Karina Whalley


The Royal Bank of Scotland chief Stephen Hester has bowed to political and public pressure by refusing to accept a bonus of shares worth £963,000 (€1,151,000/$1,510,000) for 2011.

The bank, which is majority owned by the UK taxpayer, has come under fire for planning to pay almost £1.5bn to employees, despite RBS shares having slumped over 40 per cent in 2011.

Hestor’s refusal follows the bank’s chairman, Sir Philip Hampton, waiving his payout of 5.17m RBS shares worth £1.4m (€1.79m/$2.4m).

UK Chancellor George Osborne has backed Hestor’s decision, saying it was “sensible and welcome” and added: “[This] enables Stephen Hester to focus on the very important job he has got to do, namely to get back billions of pounds of taxpayers’ money that was put into RBS.”

The UK’s Labour party leader, Ed Miliband commended the RBS chief for having “done the right thing”.

Hester faced calls from unions, politicians and the public to turn down the controversial bonus last week. Labour had also urged the government to block the award last week, however UK Prime Minister David Cameron said the contract should be honoured and pointed out that the payout had been cut in half compared to last year.

Related articles:
UK slammed on Hester’s £1m bonus
Lloyds chief waives £2.4m bonus
UK study: Bank bonuses ‘bounce back’
EU watchdog denies fresh bonus probe
Banks ignored on EU bonus calls

RBS announced a 3,500 cut in jobs recently and failed to reach government lending targets for providing enough credit to small and medium size businesses.

Despite this, the bank’s remuneration committee decided last week to award Hester 3.6m shares in the bank, which are worth almost £1m (€1.2m/$1.57m). If Hester had accepted it, the payout would have consisted entirely of deferred shares subject to holding conditions, ensuring that they cannot be redeemed in full until late 2014, the bank said.

The bonus would have supplemented Hester’s £1.2m (€1.43m/$2.24m) yearly salary, though it is lower than the all-share bonus worth just over £2m (€2.38m/$3.14m) that the bank chief received in 2010.

The all-share payout was approved at RBS’s annual general meeting by 99.2 per cent of shareholders, including the UK Financial Investments group, owned by the government and responsible for managing its investment in the bank.



WHAT DO YOU THINK?
 
Name:
   
Email:
   
Comment:
   
Post as Anonymous
  Display name
   
Please, enter security code
   
 

No comments yet.
Login Register Most read Most commented
Username

Password

>> Forgotten your password?
>> Sign Up  

GFS is pleased to offer you a two-week free trial. You will receive a daily email bulletin of the latest regulatory news and analysis and a weekly email round-up. Please complete the free trial form. You will also receive full access to our online site.

EDITOR’S CHOICE

  • Diamond warns against ‘Balkanisation’
  • ABI: UK insurers must keep EU links
  • EU Parliament site hit by hacktivists
  • George Soros: New year, same crisis
  • FSB: Swiss regulator needs more teeth
  • OCC: Deriv fears are an overreaction
  • ‘Major wave’ of Solvency II drafts in May
  • IMF paper urges Aus bank capital boost
  • BoE: Limit bonuses to boost bank capital
  • 2012 vision: Increased regulatory exposure looms
  • Barnier offers hope to NYSE/Boerse
  • Esma rushes short selling consultation
  • Bowles re-elected as Econ chair
  • Hoogervorst hints at accounting slowdown
  • Asia in the year of the dragon
  • Barnier: FTT will not be forced on UK
INTERVIEWS & FEATURES

STRAW POLL

Will markets in 2012 have a tougher time than 2011?

Yes

No

Don’t know

View results

FIND A REGION
 
Global Financial Strategy - [email protected] | Home | Legal | Contact design by SDV