RBS boss rejects one million pound bonus

Published:  30 Jan at 3 PM

The chief executive of the Royal Bank of Scotland Stephen Hester has given in to political pressure and will not accept his bonus, which is worth almost £1m.

The bonus was offered in the form of a shares-only payment , and was valued at £963,000. Chancellor George Osborne described the decision as "sensible and welcome", while Labour leader Ed Miliband agreed Mr Hester has “done the right thing", reports the BBC.

The decision comes after a threat by the Labour party to force a vote on the issue after the Prime Minister, David Cameron, declined to use his power to block the bonus. The government owns 82 per cent of RBS following the highly-publicised bailout, and many in the government felt such a large bonus was inappropriate for a largely public institution.

The RBS board believes Mr Hester deserves the bonus for his work making the bank a less risky institution, but Shadow business secretary Chuka Umunna pointed out that he is already being well compensated for his work through his salary. He said Mr Hester is earning £1.2m a year, which is 46 times the national average.

Ed Miliband described David Cameron as “feeble” for refusing to block the bonus, adding that he would like to see more done in the future to stop huge bonuses and to add an increased level of responsibility to the boardroom.