Royal Bank of Scotland chief Stephen Hester, above, will get a £963,000 annual bonus, taking his total pay package to £3.3 million, despite a political outcry over bankers' bonuses.
Mr Hester's reward for his efforts to revive the troubled institution last year compares with the £2m bonus he pocketed in 2010.
RBS, which was saved from collapse by £45 billion of public money in 2008, confirmed the news in a statement last night, almost three hours after the Stock Exchange closed.
Labour said the deal showed up as false the UK Government's claims that the board of the Edinburgh-based bank was "contractually bound" for several years over such payments.
Chris Leslie MP, Shadow Financial Secretary to the Treasury, said: "We now know that ministerial claims that the RBS board is contractually bound for years over bonuses were false.
"The board decides bonuses on an annual basis, and the biggest shareholder at the bank is the Government. 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."
He added: "Indeed, 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.
"Instead of fiddling at the margins of this issue, David Cameron should take proper action on excessive executive pay as well as agree to Labour's call for a new tax on bankers' bonuses this year to fund 100,000 jobs for young people."
RBS said Mr Hester received 3.6 million deferred RBS shares, which were valued at 26.7p as the stock markets closed on Wednesday, when the decision was made. The shares are subject to certain conditions that mean their full value cannot be received until late 2014.
LibDem Business Secretary Vince Cable this week unveiled proposals to crack down on hefty salaries and bonuses, including binding votes for shareholders and improved transparency.
Sir Philip Hampton, RBS Group chairman, said: "Stephen Hester's pay award reflects progress in the categories agreed with our shareholders as set out in the Remuneration Report."
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