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RBS chief Hester alters pay deal in bid to placate critics

<div>ROYAL BANK of Scotland chief executive Stephen Hester yesterday pledged to defer cashing incentive shares worth up to &pound;3.4m for an extra two years in an attempt to defuse outrage over his controversial pay package.<br /><br />Hester&rsquo;s overall package is potentially worth &pound;9.7m, RBS said last week, drawing fire from politicians and trade unions who said his pay was excessive for a bank 70 per cent owned by the UK government.<br /><br />The package includes a medium-term share&nbsp;award worth &pound;3.4m if RBS shares hit 70p, which would be paid in respect of 2009 but only claimable in 2012, and now effectively deferred until 2014.<br /><br />This means Hester will not be able to access rewards for five years, a practice&nbsp;previously unheard of in the City.<br /><br />Hester agreed to the modest concession after concerns were raised that his package was too focused on short-term performance.</div>
<div><br />The move brings the award into line with a suggestion from the Association of British Insurers (ABI) last week. ABI director of investment affairs&nbsp;Peter Montagnon said: &ldquo;Large awards are fine if real value is created, but it must have a sustainable and long-term focus.&rdquo;</div>