Royal Bank of Scotland CEO bonus row

The Royal Bank of Scotland CEO has been pressured not to accept his yearly bonus that is valued at around £1m after the taxpayer owned bank confirmed that Stephen Hester would still receive a bonus. The payment is funded in shares and is 60% of what he would have received ordinarily, and could be worth even more by the time he is actually able to take it out in 2014.  This bonus comes on top of the £1.2m that he gets every year in salary.

Treasury sources and the RBS defended the bonus as many people were quick to criticise the obscene amount of money. Chuka Umunna, the Shadow business secretary, stated in an interview that Hester should not be given the bonus because while he has done a good job that is what he is being paid to do and it is not an extraordinary feat.

He went on to explain that a bonus should only be given for something that is extraordinary and that most people get a base salary that is much lower without any hope of a bonus. Lord Adair Turner, the head of the financial watchdog organisation, stated that excessive bonuses that are given out to executives are not healthy for society.

Liberal Democrat foreign office minister Jeremy Browne also pointed out that even if Hester has a bonus opportunity written into his contract he is not obligated to actually take it.  Browne expanded to say that it only takes him three days to get paid what a soldier earns in a year fighting in Afghanistan, and as a public servant working at a bank owed by taxpayers he needs to think more like a public servant would.

Also adding pressure is the fact that Chief executive Antonio Horta-Osorio of Lloyds Banking Group announced that he would not accept his bonus this year.