Hester set to be rewarded with shares

RBS chief executive Stephen Hester is unlikely to receive a cash bonus for last year.

The bank, which is majority-owned by the taxpayer, is instead thought to be offering the chief executive shares in the bank and could defer the reward for several years, in accordance with new European bonus rules.

Hester is eligible for a maximum bonus of twice his £1.22m salary, though any possible reward could face opposition from UK Financial Investments, the manager of the taxpayer’s stake in the bank.

The RBS chief executive has waived his bonus for the previous two years, in a bid to quell populist anger over executive remuneration.

The remuneration committee of the bank, which was bailed out with £45bn of public money at the height of the crisis, says it has yet to decide on bonuses.

Other senior executives at the bank will also likely receive any variable remuneration in deferred shares, it is understood.