IBOA says RBS chief's bonus is totally unacceptable
Issued : 27 January 2012
The announcement that RBS Chief Executive Stephen Hester is to receive an annual bonus payment currently worth almost �1 million on top of a basic salary of �1.2 million is adding insult to injury as far as staff in its Irish subsidiary, Ulster Bank is concerned. "Just two weeks after the Bank announced plans to make 950 staff redundant in Ireland, we now learn that the board of RBS - which is 82% owned by the British State - has sanctioned this excessively generous bonus payment to Stephen Hester," declared Larry Broderick, General Secretary of IBOA The Finance Union.
"If the Chief Executive's performance was assessed according to the kind of criteria applied to our members in Ulster Bank, there is no way he would have been given this award," said Mr. Broderick. "In his key performance indicators, Stephen Hester has fallen short. The RBS share price has been more than halved in the last year - while the Bank has also failed to meet the targets for lending to small firms set by the British Government.
"While some commentators have suggested that the Board of RBS are to be commended for awarding this bonus in shares - rather than cash - we should not lose sight of the fact that even a modest improvement in the RBS share price will now produce a substantial additional windfall for Mr. Hester. Furthermore, this is not the only bonus payment available to him. Apart from this annual award, Mr. Hester also stands to benefit from a long-term incentive plan and a possible additional contribution to his personal pension scheme.
"These lavish rewards for the Chief Executive - which, we understand, may be accompanied by substantial bonuses for other top executives in RBS - are in sharp contrast to the Bank's treatment of its Ulster Bank employees - who have been told that the Bank does not intend to match the terms of its 2009 redundancy deal in the new restructuring programme it is now seeking to introduce in Ireland.
"Mr. Hester's ultimate boss - the British Prime Minister, David Cameron - is very fond of reminding the citizens of the United Kingdom that 'they are all in it together.' It is clear after today's announcement that, to paraphrase George Orwell, some are more in it than others," added the IBOA leader