RBS's Hester gives up bonus, but the debate is likely far from over

30th Jan 2012 07:33

Stephen Hester, the Chief Executive of Royal Bank of Scotland (RBS), will not accept his bonus share award, according to several reports on Monday morning.The decision follows the opposition Labour party threatening to force a vote on the issue in the House of Commons. Under the terms of his contract, Hester is due an award of RBS shares worth around £963,000 based on the price of RBS shares at the end of January. The UK tax payer owns 83% of RBS, for which it paid the princely sum of £45bn.There had been mounting political anger at a tax-payer funded bank handing out a bonus to an employee who already receives a salary of £1.2m.The award was agreed in recognition of Hester's moves to "de-risk" the bank, which back in 2008 almost collapsed after borrowing too heavily and failing to refinance its debts.Nonetheless, there are those who point out that while over the last 12 months the stock is broadly flat over the last five years RBS has lost 96% of its value.However, there are also those who take the opposite line, such as former BBC 'Dragon' and business leader James Caan who on Friday was cited as having said that, "For Ed Miliband to suggest withdrawing Stephen Hester's bonus, I think is wrong. As a nation we need to look up to our leaders as men of integrity, as a matter of professional integrity to ask him to deliver then after the event to go back is wrong. "The issue of morality should not come into this; the decision is down to Stephen Hester himself. It is not right for me or any other party to decide whether he should take or waive the bonus. From my perspective it is something that is earned based on the agreement he entered into, therefore the decision should be left to him alone." BS