RBS boss in 9.6m pay bonanza
ROYAL Bank of Scotland is set to announce a £9.6m pay package for chief executive Stephen Hester, in a deal agreed after his predecessor Sir Fred Goodwin agreed to give up a third of his pension.
The long-term incentive plan was approved on Friday by UK Financial Invesments, controller of the state’s 70 per cent stake in RBS, and other top-20 shareholders.
The package includes £1.2m in salary, a projected £2m of annual non-cash bonus payments and around £6.4m of long-term share and stock option awards. He would only receive the maximum share grant if the RBS share price passed a threshold of 70p. It closed on Friday at 37.2p.
The pay packet is roughly in line with that of other UK bank chief executives such as HSBC boss Michael Geoghegan, who earns a basic £1.1m salary plus long-term incentives of £7.5m. However it is more than salaries at some other state-supported banks.
RBS chairman Sir Philip Hampton is thought to have driven both Hester’s pay deal, and the deal to shrink Goodwin’s pension from £555,000 a year to £342,500.