£2m bonus for the ex-boss of RBS who left job 2 years ago
FoRMER Royal Bank of Scotland boss Stephen Hester has been handed a £2million bonus — almost three years after he was pushed out of his job by George osborne.
Details of the award emerged in the bank’s annual report, which showed how the state-backed lender had lurched to another £2billion loss last year.
Mr Hester’s windfall from a 2012 shares bonus — which comes on top of a £2.2million pay package in his new role as boss of insurance giant RSA — was branded a ‘reward for failure’ by a union leader last night.
Unite’s Rob MacGregor said it ‘beggars belief that two years after being forced out of RBS Stephen Hester is enjoying a final payday.’ Tory MP Mark Garnier said the public would be baffled why the former CEo was still being paid ‘heroic sums of money’.
And Vince Cable, who was business secretary when Mr Hester ran RBS, said: ‘The public will find it difficult to understand why enormous bonuses are still being paid.’
The new results mark an eighth consecutive year in the red for the High Street giant, which also owns NatWest. It has racked up more than £50billion of losses since the financial crisis and is still 73 per cent owned by taxpayers following its 2008 bailout. RBS had flagged up its looming loss last month, blaming £2.5billion in ‘clean-up’ costs following mis-selling scandals in Britain and the US.
But the dire state of its finances still sent shockwaves through the City. More than £2billion was wiped off the group’s value as its shares plunged 7 per cent to just 226.6p.
Another ex-RBS man won an even larger windfall. Bruce Van Saun, whose US bank Citizens was carved out of RBS, got £2.9million from a long-term shares bonus.
Mr Hester’s successor, New Zealander Ross McEwan, 58, also had a bumper payday as his package more than doubled to £3.8million. His decision to give half of a £1million shares allowance to charity failed to ward off another row over excessive pay. The report revealed that more than 121 RBS staff have packages of more than £800,000 and it paid more than £373million in bonuses, down from £421million last year. Chairman Sir Howard Davies insisted such high rewards were necessary to hang on to senior staff.
Stefan Stern, director of campaign group the High Pay Centre, said Mr Hester’s huge bonus was a bitter pill for struggling Britons, creating ‘a sense of resignation and despair – and a sense that bankers are a completely different species from the rest of us’.
The latest setback is a blow to Mr osborne. The chancellor had planned to continue selling off the public’s stake in RBS but the current share price is less than half the ‘ break- even’ figure of 500p which would return a profit to taxpayers.