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RBS chair waives bonus amid criticism of payouts

RBS chair waives bonus amid criticism of payouts

January 29th, 2012 in News

LONDON (AP) - Royal Bank of Scotland chairman Philip Hampton is waiving a bonus of 1.4 million pounds ($2.2 million) in shares, the bank said Saturday as criticism swirled over a payout to the chief executive of the taxpayer-owned institution.

The bank said Saturday that Hampton would not receive the 5.17 million shares he was awarded when he joined RBS in 2009.

The British government spent 45 billion pounds bailing out the bank three years ago. It still owns an 82 percent stake, and politicians are fuming about a bonus of nearly a million pounds given to chief executive Stephen Hester.

Hester and Hampton were brought in after Fred Goodwin, who led RBS's ill-fated takeover of Dutch bank ABN Amro, stepped down in October 2008 as the government was spending billions to prop up the bank.

The board of directors decided this week to award Hester a bonus of 3.6 million shares - worth just under 1 million pounds at Friday's closing share price of 27.74 pence.

Hampton's bonus was part of a "golden handshake" awarded when he joined RBS, but which he declined to take at a time when the government is hitting Britons with painful spending cuts and tax hikes.

His decision could increase pressure on Hester to refuse his own windfall.

Prime Minister David Cameron said Saturday that "it's a matter for him," but pointed out that Hester's bonus was half of the previous year's.

"It's obviously his decision," Cameron said. "My decision is to make sure the team at RBS get on with the job of turning the bank round and we made our views very clear on the bonus and that's why it was cut in half compared to last year."

A year ago, Hester was awarded 4.5 million shares, then said to be worth 2 million pounds. They would be worth 1.3 million pounds at the current share price.