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RBS chief to be rewarded with shares worth £1.6m

Published on 10 March 2012

THE furore surrounding bankers' pay has been refuelled by figures revealing that Stephen Hester, chief executive of RBS, is to receive shares worth £1.6 million, with other key figures at bailed-out banks also due to benefit from multi-million pound windfalls.

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Details of Mr Hester's reward package emerged just weeks after he waived a £1m bonus amid political pressure. His latest incentive plan could be worth as much as £3.6m despite his bank recently posting losses of £2 billion for 2011.

The highest-paid RBS banker last year was US boss Ellen Alemany, who received a total remuneration package of £4.7m.

Mr Hester is one of three chiefs of state-backed banks to receive seven-figure share rewards, with those in charge of Barclays and Lloyds also to benefit.

The disclosures have reignited accusations that bankers are escaping the economic storm that is eroding the standard of living of ordinary families.

It has also been revealed that other high-profile figures at the bank, which was saved by a £45bn Government rescue package, will also receive windfalls.

John Hourican, RBS's investment banking head, is set to receive shares worth £4.2m next month when a previous long-term incentive plan matures; he also received a shares bonus of some £2.5m for 2011.

RBS chairman Philip Hampton said: "Running RBS on commercial grounds is the only way to make the bank safer and more valuable.

"An inescapable part of commercial success is making sure we attract, and keep, good, well-motivated people."

Reports released yesterday also show that Barclays' boss Bob Diamond made £6.3m last year. He is set to receive shares worth some £4.9m in three years on top of his £1.35m salary despite a fall in the bank's profits and it being hit by insurance mis-selling compensation claims.

It also said that he pocketed £15.1m last year as employee benefit schemes bore fruit, while Barclays also footed a £5.7m tax bill racked up when he left the US to take the top job in the UK.

Mr Diamond, however, was not the highest-paid member of staff at the bank in 2011. Two other unnamed executives, thought likely to be Rich Ricci and Jerry del Missier, who jointly run its investment banking division, received total pay-outs of £6.7m and £6.5m.

The TUC's general secretary, Brendan Barber, said Mr Diamond's award "epitomises how banks have failed the wider economy and got away with it."

He added: "People are sick of seeing money that should be spent supporting businesses being lavished on the very people that brought our economy to its knees a few years ago.

"Ministers must do more to force banks to prioritise supporting the real economy over enriching their senior staff."

Antonio Horta-Osorio, of Lloyds, is to be awarded 9.6 million shares, worth £3.3m. These will mature in three years, despite him turning down his bonus after taking sick leave.

Lloyds, which does not have a large investment banking arm like most rivals, revealed that its highest-paid member of staff, who was not named, pocketed £2.8m in 2011, while the biggest bonus award was 2.4 million shares, worth some £800,000.

David Hillman, spokesman for the Robin Hood Tax campaign, said: "The pockets of Bob Diamond and his fellow bankers are busting at the seams from their multi-million-pound pay packets, while the Exchequer is being left short by the bank's tax-avoidance measures."

HM Revenue and Customs' claims that Barclays tried to avoid paying tax were not taken into account, but they could impact on Mr Diamond's 2012 payout.

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