The Royal Bank of Scotland (RBS) is expected to reveal that it has agreed a £9.6m pay deal for its chief executive Stephen Hester.
The deal for the boss of the publicly-owned bank is expected to spark anger as it comes after the bank was forced to cut over 7,000 UK jobs and the scandal about former chief executive Fred Goodwin’s £17m pension award.
The deal was agreed on Friday and Hester is expected to receive a £1.2m salary, about £2m as an annual non-cash bonus and £6.4m of long-term share options. For him to receive the full package it is thought RBS will have to meet shareholder targets of doubling the share price to 70p within three years.
Roger Lawson, of the UK Shareholders Association, said: “The government doesn’t seem to have learned anything. Such a package incentivises reckless behaviour and encourages risk-taking.
“It is absolutely outrageous that the government does not use its power to bring the remuneration of bankers in these companies down to a reasonable level.”
Matthew Elliott, chief executive of the TaxPayers’ Alliance, added: “Neither RBS nor the government are taking due care of taxpayers’ money. Just because RBS has been protected from bankruptcy by a public bail-out does not mean it should ignore all market conditions.
“At a time when people are losing their jobs, inflation is flat-lining and millions are taking pay cuts, it is unjustified to pay Mr Hester such a huge amount. Taxpayers would get a better deal and a more motivated management if he was simply promised a large reward when the bank repays all the taxpayers’ money it was given and re-enters the private sector.”