British bank chief criticized over bonus

Syndicated from IANS | Published on Sat, Jan 28 2012 3:42 IST | 91 Views | Add comment
London, Jan 28

Head of the Royal Bank of Scotland (RBS) Stephen Hester has been criticized for receiving nearly one million pound bonus.

The 963,000-pound share bonus is on top of his 1.2 million-pound basic salary. It was valued on the bank's closing share price Wednesday and will be deferred for three years.

More than 80 percent of the bank is now owned by British taxpayers after it was saved in a biggest bailout move in the country's history.

Leader of the opposition Labor Party Ed Miliband called the payout a "disgraceful failure of leadership by the Prime Minister (David Cameron)," Xinhua reported Friday.

Cameron had said he would regard a bonus of over 1 million pounds as "unacceptable".

"He (Cameron) must now explain, not least to the British people, why he has allowed this to happen," Miliband said.

Even members of Cameron's Conservative party and his Liberal Democrat allies in the coalition government also voiced their disapproval.

Boris Johnson, the Conservative mayor of London, said he was "bewildered" and was "at a loss to justify" the scale of the bonus.

"It's a state owned bank. So the idea that this is not in the control of the government seems to me to be far-fetched," he said.

Deputy Prime Minister and Liberal Democrat leader Nick Clegg also joined the condemnation.

"I have a huge amount of sympathy about people's sense of dismay when they see these figures that seem from another planet," he said.

Jeremy Browne, a Liberal Democrat foreign office minister, said Hester should turn down the bonus.

RBS said the bonus was for "substantial progress in making RBS safer, rebuilding performance in many businesses and improving customer service and support".

In a recent speech focusing on the economy, Cameron said the country must "build a better economy" that is "fair and worthwhile."

He called for greater transparency to help curb excessive pay of bank executives.

He said the government was consulting on new rules which would require Britain's 15 largest banks to reveal remuneration for their eight highest-paid non-board executives.

Business Secretary Vince Cable unveiled plans designed to curb executive pay in a speech to the parliament.

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