RBS boss in 9.6m pay bonanza

ROYAL Bank of Scotland is set to announce a &pound;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.<br /><br />The long-term incentive plan was approved on Friday by UK Financial Invesments, controller of the state&rsquo;s 70 per cent stake in RBS, and other top-20 shareholders.<br /><br />The package includes &pound;1.2m in salary, a projected &pound;2m of annual non-cash bonus payments and around &pound;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.<br /><br />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 &pound;1.1m salary plus long-term incentives of &pound;7.5m. However it is more than salaries at some other state-supported banks.<br /><br />RBS chairman Sir Philip Hampton is thought to have driven both Hester&rsquo;s pay deal, and the deal to shrink Goodwin&rsquo;s pension from &pound;555,000 a year to &pound;342,500.