Criticism grows over RBS CEO Stephen Hester's £1mn bonus


Criticism over RBS CEO £1 million bonus continues with politicians and business leaders weighing in as leading business leader deploys tank into central London with clear message

After yesterday's announcement that the Royal Bank of Scotland will be paying CEO Stephen Hester a bonus in the region of £1,000,000, it comes as no surprise that many of the public are bemused by the huge sum payed out despite David Cameron calling on 'fat-cat' pay to stop. The bank, of which more than 80% is owned by the taxpayer, has led many to believe that it has the best interests of the public at heart. Today politicians criticised RBS for their decision. Ed Miliband said "It's a disgraceful failure of leadership by the prime minister." He added "He's been promising, for months, action against excessive bonuses, executive pay, and now he's nodded through a million-pound bonus. He's also been lecturing shareholders about how they need to be more active in holding executives to account", the Guardian reported.

Mr Miliband has called for a cut in 'fat-cat' pay before. "He owns, through the British government, 83% of the Royal Bank of Scotland. He must now explain, not least to the British people, why he has allowed this to happen."

The Mayor of London Boris Johnson, speaking from the World Economic Forum in Davos, told the BBC that "The idea that this is not in the control of the government seems to me to be far-fetched. Stephen Hester is an able man, probably doing a difficult job, and his contract must have been drawn up, I guess, when he was appointed in 2008 under Alistair Darling and Gordon Brown.

"I do not know what they were thinking of when they drew it up that way, but it certainly seems to me to be right that the government should step in and sort it out. People will not understand how somebody can get a whacking great bonus like that when they are basically running a state-owned concern, and I am at a loss to justify it."

George Osbourne has himself said that the previous Labour government were indeed the ones who put a clause into Mr Hester's contract which has allowed this to happen. The bonus will provide the RBS chief a further 3.6m bank shares that can be cashed in in 2014. At current prices, the shares are worth £963,000 the Guardian writes. The question is whether such a bonus is fair and whether Mr Hester should accept the bonus. Since Hester joined RBS in 2008, the bank has cut 33,000 jobs. Hester is widely regarding to have made widespread positive change to the bank but with the UK in recession and financial turmoil, a bonus of that amount for a predominantly state owned bank, when politicians tell us we are in austere times, seems highly contradictory.

Some have backed Mr Heston and said he fully deserves the bonus for bringing calm to the bank. However, the chairman of the UK’s leading discount website has responded to the news of the RBS bonus for CEO Stephen Hester’s by deploying a tank in Central London today with a clear message to consumers.

Mark Pearson, the chairman of the UK’s leading discount website deployed an army tank which displayed banners with the simple message ‘Didn’t get an RBS bonus? Use’ in a bid to show passers-by that despite the heavily criticised bonus for Mr Hester, there is still hope for everyone. The tank set off from Shoreditch High Street and travelled around London to The City, passing by various RBS head offices to spread the word.

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