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Cameron Promises on Executive Pay 'Worthless' as RBS Boss Pockets £1m Bonus

ByBinary Options Strategy
Published 01/27/2012, 07:07 AM
Updated 05/14/2017, 06:45 AM

Labour has accused Prime Minister David Cameron of making "utterly worthless" promises on curbing executive pay after it emerged that the boss of state-rescued RBS is getting a near £1m bonus for 2011.

Stephen Hester will get a performance bonus of about £1m in the bank's shares, though he will not be able to sell them for three years.

Board members of the bank, which is 82 percent owned by taxpayers, are said to have agreed to the proposals at a meeting on 26 January.

"Nobody doubts that Stephen Hester has done some important things at RBS, but what this award shows is David Cameron's promises about reining in excessive bonuses at state-owned banks or using shareholder power have proved to be utterly worthless," Chris Leslie, Labour's shadow financial secretary to the Treasury, said.

"Anyone who thinks it is acceptable to award a bonus of almost £1m on top of a basic salary of £1.2m in these tough times is desperately out of touch with millions of people who are struggling to make ends meet."

A government bailout spared RBS from collapse in the 2008 financial crisis.

Hester has shed tens of thousands of RBS staff since he took over from Sir Fred Goodwin as chief executive at the end of 2008. There has also been a massive scaling back of the bank's once huge operations.

Ed Miliband, Labour leader, called on Cameron to stop Hester getting a large bonus.

"The best thing that could happen is that top management at RBS recognises the need for restraint," Miliband told the Observer.

"But if it doesn't happen, Cameron should act to stop Stephen Hester being paid a bonus of this scale."

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