THE CHIEF executive of state-owned lender Royal Bank of Scotland (RBS) could receive a bonus of up to £4.5m, under a long-term incentive scheme revealed last night.
Stephen Hester could take home the all-share reward if he hits strict performance targets over the next three years, on top of a £2m bonus he will get for last year.
The payment comes as part of an all-share bonus pool worth up to £28m for nine of RBS’ top staff, including Hester.
RBS last night revealed its long-term incentive plan ahead of further bonus disclosures next week, agreed under the government’s Project Merlin talks.
Hester’s award of 10.1m shares in the bank will vest in March 2014 and will be dependent on him sufficiently turning around the state-owned lender as well as meeting other strategic targets.
The bank’s second highest paid executive under the long-term incentive plan revealed last night was finance director Bruce van Saun, who will be in line for a £2.8m reward if he hits targets.
RBS could come under renewed scrutiny for its bonus plans as a result of its 83 per cent taxpayer ownership, yet the bank last night defended its long-term reward scheme.
A spokesperson said: “These awards follow exhaustive consultation with our shareholders and we believe they appropriately balance demonstrating restraint while remaining fully supportive of our leadership through the RBS turnaround plan.”