Bonus betrayal

His chairman, Sir Philip Hampton, had already declined a similar payout and the political pressure had been mounting on Mr Hester, in part because he already commanded an annual salary worth £1.2m which should be sufficient for any individual.

That said, both men are now paying a heavy price, financially-speaking, for failures of political leadership – failures that Ed Miliband and David Cameron conveniently ignored as they turned up the heat on the embattled RBS boss.

Neither Mr Hester, or Sir Philip, were at the bank when it was bailed out by the last government because of the recklessness of Sir Fred Goodwin and others. They were brought in to stabilise the finances of the RBS.

Yet, in his candid memoir, Alistair Darling, the then Chancellor, conceded that Gordon Brown’s government, of which Mr Miliband was a prominent member, paid insufficient attention to issues such as bonuses and bank lending practices.

That said, Mr Darling implied that Mr Hester’s salary was justified because it was the going rate for the job – and that the RBS needed a heavyweight banker at the helm. If Mr Miliband had objections, why did he not speak out in 2008?

However the messages have been equally mixed from Mr Cameron. Having campaigned this month against executive pay, he insisted that the RBS management should be kept at arm’s length from Ministers rather than imposing a discretionary clause that could have revoked the bonus. Yet, given the number of Ministers who condemned the payout, what constitutes “arm’s length” when the public effectively owns more than 80 per cent of the bank? As such, Mr Cameron needs to explain what he intends to do next year, assuming that the unfortunate Mr Hester is still prepared to be hung out to dry in this way.