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Royal Bank of Scotland chief executive Stephen Hester has today tried to deflate the controversy over his pay packet by pledging to retain any share awards for an extra two years.
Hester's three-year, £6.4 million performance package could lead to a £4.8 million bonus if the bank meets certain targets - including a 70p share price - by 2012. But after the deal incited criticism, Hester wrote to the Association of British Insurers offering to defer any rewards made this year until June 2014.
Peter Montagnon, director of investment affairs at the ABI, said: “This is a significant and welcome development. Large awards are fine if real value is created, but it must have a sustainable and long-term focus. The focus is now clearly in building up a sustainable future for RBS in the interests of all stakeholders, including shareholders, employees and the broader economy.”
Hester's deferral comes after City Minister Lord Myners attacked the £10 million pay deal handed to the new boss of taxpayer-controlled RBS at the British Bankers' Association annual meeting this week. He condemned the “perverse” and “nonsensical” bonuses that link rewards to share-price movements.
