Bank bonus re-ignites controversy

Royal Bank of Scotland boss Stephen Hester has been awarded an extra shares bonus worth as much as £4.5m – taking his total pay package for 2010 to a potential £7.7m.

The award – one of the bank’s long-term incentives – is on top of a £2m annual bonus already confirmed and his £1.2m salary.

Bonuses for other executives at RBS, which is 83 per cent owned by taxpayers, including a £1.4m annual handout and potential £2.8m long-term incentive payout for finance boss Bruce Van Saun.

The bank has also earmarked six million shares for Mr Hester’s 2011 maximum annual bonus, which could be worth about £2.7m, based on today’s share price.

These details further stoke controversy over bank pay after it emerged Barclays boss Bob Diamond’s total pay package was worth £9m last year.

Executive pay at RBS is in the spotlight as the group struck a deal with the Government as part of the “Project Merlin” agreement to limit pay.

Confirmation of the bonus came after annual figures showed the bank remained in the red for 2010 despite an improved performance, with losses of £1.1bn.

RBS said Mr Hester’s award is deferred until 2014 and depends on meeting performance targets.

Trade union Unite slammed it as a “disgrace”.

General secretary Len McCluskey said: “While most taxpayers continue to suffer during tough economic times the top bankers at RBS, and yesterday at Barclays, celebrate their ludicrous bonuses.

“While everyone else is worried about paying their household bills, these people are counting their bundles of cash.”