Under Pressure, Bank CEO Waives $1.5M Bonus

Royal Bank of Scotland's Stephen Hester caves amid controversy
By Mark Russell,  Newser Staff
Posted Jan 30, 2012 3:41 AM CST
Under Pressure, British Bank CEO Waives $1.5M Bonus
A bailout in 2008 left the British government owning 82% of the Royal Bank of Scotland.   (AP Photo/Sang Tan)

The chief of Britain's second-largest bank declined his $1.5 million bonus yesterday, hours after opposition lawmakers vowed to put it to a vote, reports the Scotsman. The bank's board argued that Royal Bank of Scotland CEO Stephen Hester's bonus was reasonable, especially since his base pay of $1.9 million is lower than that of most comparable CEOs. But many lawmakers rejected that logic, saying that since RBS was bailed out heavily in 2008 and is now mostly public-owned, it should focus on paying back British taxpayers.

Pressure increased on Hester over the weekend after it was revealed the the bank's chairman waved a $2.2 million signing bonus. "We need a government that will tax bankers’ bonuses and bring responsibility to the boardroom," said the leader of the Labour Party. There is, however, a silver lining for Hester: The bank has a two-tier bonus system, and while he turned down the short-term bonus, he stands to receive a long-term bonus that could be worth as much as $10 million. (Read more Royal Bank of Scotland stories.)

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