£7.7million for boss of a bank WE bailed out . . . even though they lost £1bn last year



Stephen Hester, Royal Bank of Scotland's chief executive has been handed £7.7million

Royal Bank of Scotland was branded ‘a disgrace’ after handing its chief executive Stephen Hester a £7.7million pay package for last year – even though the bailed-out bank lost more than £1billion.



The bank revealed that Mr Hester and eight of his top team are sharing a bonus and shares windfall totalling £28million for 2010, despite presiding over a dismal performance.



Mr Hester gets a £1.2million base salary, plus a £2.01million bonus in shares and the chance to get a further £4.45million under a long-term incentive scheme.



The huge rewards were denounced by unions as a sign that greedy bankers are out of touch with reality at a time when the rest of the country is suffering.



It came just one day after Barclays revealed staggeringly high payouts that make a mockery of the recent Merlin deal on pay and lending.



Barclays’ two investment banking bosses, Jerry del Missier and Rich Ricci, were handed packages worth a total of £47million and £44million respectively for last year. And its chief executive Bob Diamond racked up £27million from pay and share schemes.

Len McCluskey, General Secretary of union Unite, said: ‘These bonuses are a disgrace.

'While most taxpayers continue to suffer during tough economic times, the top bankers at RBS, and yesterday at Barclays, celebrate their ludicrous bonuses.



‘While everyone else is worried about paying their household bills, these people are counting their bundles of cash.’

Mr Hester gets a £1.2million base salary, plus a £2.01million bonus in shares and the chance to get a further £4.45million under a long-term incentive scheme

Mr McCluskey called upon the Government to prevent RBS, which is 83 per cent state owned, from paying out the bonuses.

The revelations were made in disclosures to the stock market. They came after the bank admitted at its annual results announcement last month that ‘more than one hundred’ of its staff earned over £1million in 2010.



And the final rewards could be even higher, since many of these bankers apart from Mr Hester could have further top-up payments, which will be revealed in the annual report next week.



HOW HIS PAY COMPARES WITH THAT PAID OUT AT BARCLAYS

The Barclays boss Bob Diamond was paid £27m, less than originally expected

The latest announcement shows that the bank’s finance director Bruce Van Saun received £4.1million in bonus and under the long-term incentive scheme.

The boss of RBS’s U.S. bank Citizens, Ellen Alemany, gets around £3.6million.

The bank’s head of restructuring and risk Nathan Bostock was awarded shares worth £2.6million, while the head of its UK high street bank Brian Hartzer gets £2.5million in shares.

Despite the huge payouts, thousands of RBS shareholders, including many former employees, have little hope of ever recouping the money they have lost on the bank's shares

Another big winner was the boss of global banking and markets, John Hourican, who was handed £2.7million in shares.



The windfall for RBS bankers was unveiled in more than 20 pages of disclosures to the stock market. The payments will be made in shares because RBS has been banned from handing out big cash bonuses.



However, this does not stop most of the bosses from cashing in a chunk of the reward later this month.



Some of the share payments are dependent on the bank’s future performance over the next three years.



RBS said in a statement: ‘These awards follow exhaustive consultation with our shareholders and we believe they appropriately balance demonstrating restraint while remaining fully supportive of our leadership through the RBS turnaround plan.’

Its shareholders – including UK Financial Investments Limited, which manages the Government stake – approved the long-term incentive scheme in a vote last year. And the bonuses for 2010 have also been supported by UKFI.

Meanwhile thousands of RBS shareholders, including many former employees, have little hope of ever recouping the money they have lost on the bank’s shares.

RBS’s shares were worth 600 pence each in the spring of 2007, before it embarked on an ill-thought out plan to buy Dutch bank ABN Amro. They now stand at just 44p each.



The bank sealed the deal to buy ABN Amro just as the credit crisis was beginning, taking on too much debt. It was then forced into a £12billion fundraising effort – asking its shareholders to invest more. But this still wasn’t enough and in 2008 the Government had to step in to bail out the bank.



Some £45.5billion of taxpayers’ funds have been injected into it.

