Hester gave up £1m bonus to avoid 'pariah' status

You do wonder at the thought process the RBS board went through when his bonus came up for discussion, and then Hester's own thinking before it was officially announced.

Presumably they, and he, assumed that there wouldn't be an outcry - or if there was, it would soon blow over?

If that's the case, then it's just an illustration of the cosseted bubble in which these people live.

If it isn't the case, then we're dealing with blind arrogance on an industrial scale.

It is utterly disgraceful that Hester has been mugged in this way by the baying mobs which have been egged on by the media. Hester had a contract which had been agreeed by all concerned prior to him taking up his position. The government was able to welch on this in response to "massive public and political outcry". He has done well and would have done a lot better if Osborne and Cable had not screwed things up for all of us. Their wise intervention cost us about £20bn. Why is no public outcry over the ridiculous salaries we pay to the likes of Robert Peston or for that matter the limp political weasels we have in Parliament? Do you think they are in touch with reality - sure they beef on wheher their subsidised chips should be inm a bucket or stacked. Get real, Hester was doing a job he was asked to do by the State whic is more than can be said for our politicians and the free loaders at the BBC such as Peston et al with their gold plated pensions. Oh no may be they live in the real world and we shouls just be quiet and pay our taxes so they can keep their snouts in the trough and keep screwing things up for the rest of us.

Mr Hester was given a contract by the Labour government when they were desperate for him to run RBS and pilloried when he received what he was due. On a £2 million salary he would pay £1 million tax anyway. Conduct of mob and media quite sickening.

Despite the envious outcry prompted, as usual, by the sensation-seeking media, and Hester's generous renunciation of his bonus, I am uneasy about this type of contract-breaking. Surely it would be better in future to make it possible, as planned, for shareholders to decide on remuneration, and in the process perhaps, substantially reduce salaries but retain generous bonuses to strengthen incentives. We taxpayers need RBS to become a strong profitable company, so that we can get a return on our investment.

l feel the point is rather being missed here. That is, how useful is RBS to this country in the first place.

Other countries have banks that focus on the high street, we are well behind with payment innovation, Africa generally is streets ahead with mobile payment systems, Iceland's 2nd tier banks offer the very popular personal finance manager systems, and our own 2nd tier banks are increasing their lending market share to British consumers and businesses and are far more focused on UK plc.

There is no need for an outdated institution like RBS any more. That is the point.

The media and politicians hoodwink the population into thinking bank bailouts came out of taxes- which is nigh on a miracle when we have run budget deficits for decades. Fact is it was borrowed money- our only hope of getting it back and avoiding higher pay in the future for either us or in turn our children, is to sell our RBS investment at cost or hopefully a profit.

Labour presumably hired the best man for the job, gave him their word on what was in it for him in the form of an employment contract and then go incandescant with rage when he asks for what they promised - says a lot about how much you can trust Red Ed.

Obviously the bright thing to do when you are trying to get your money back is to disincentivise the guy you made responsible for doing just that- are we as a nation now completely mad. If I was Hester, if you were only going to pay me half of what you said you would, I would give you only 50% of what I could do.

That idiocy is only matched by the naivity of the RBS board . What were they thinking that politicians would keep their word - how gullible.

Why not give him a share option priced at say double the share price the govt paid in the bailout? If he makes that the Nation makes Billions, would we then begrudge a £1million?

The law of unintended comnsequences will no doubt be seen in the next few decades, less inward investment in major companies coming or staying here, lower tax take , lower employment levels-etc etc well done our political class and the envious amongst us.

RBS is diversify their business following the government bailouts.

RBS is returning to making a profit for the first time since 2008. These are facts the media ignores when stirred into a frenzy by the politicians in opposition who are hell bent on scoring cheap votes with the ill-informed public who in all honesty know or understand very little about the complexity of our banking system. Hester had a contract. He performed his job. He should be rewarded accordingly. I feel it a crying shame the opposition party have managed to score a victory over the sensible direction the coalition were taking on this matter.

So mob rule now dictates banking pay. If I were him I'd resign and tell them to find some other mug to do this job.

I don't agree that he deserved such a bonus (or salary) but then the previous government should have insisted ion a pay cap (like they did in Ireland) for these nationalised Banks.

But once you sign a contract that should be binding. He was employed by the Labour government on these terms AFTER the financial crisis. He was not reponsible for the mess at RBS so it is a joke that he can be attacked in this way by Labour/Miliband.

The Labour Government gave Hester a contract that allowed for a discretionary bonus – not a statutory one. For George Osbourne to hide behind this as some sort of excuse on Saturday was pathetic in the extreme.

So not paying a bonus wouldn’t have been ‘welching’ on the deal (not like rewriting public sector pension arrangements or anything like that…) but simply recognition that paying a massive bonus of this size might not be a prudent move, given the state of the economy. Don’t forget that RBS is, as near as dammit owned by the state, so the board should surely have taken this sort of consideration into account before making such a reward.

Yes, Joe Stalin, Hester is doing a job he’s been asked to do by the state – so presumably he should have been aware of the limitations and political sensitivities around that job.

Lorraine – it’s not ‘mob rule’, it’s a public outcry (there’s a difference).

I am delighted to see that i am not the only person disappointed that Mr Hester gave in to the mob. I never had faith in public opinion - look at their views on corporal punishment - which in any case is not the opinion of the public but rather the opinion of the media scum expressed through the public.

Also I was enjoying the embarrasment of the government which strutted its stuff with huff and puff. whilst in fact being totally cowardly & impotent.

I do hope that what actually happened was David Cmeron phoned Stephen Hester and said: "If you refuse your bonus there'll be a knighthood in it for you when the show closes"

Let's leave aside the politics and the contractiual argument. Let us rather (probably heretically) question the whole principle of 'incentives' or 'performance pay'. Let's ask Stephen Hester if the promised bonus made him work harder and if the loss of it will make him work less hard. If he answers 'No' then the 'incentive' is without effect; if he answers 'Yes' then he is revealed as someone who has to be bribed to give of his best.

An 'iIncentive' either makes us dishonest (makes no difference but I'll take it because it's there) or undermines our work ethic. Is either outcome desirable?

Let us be clear: The Bonus Culture has nothing to do with encouraging or rewarding good performance. The demand for and payment of a bonus is a matter of greed.

This is bullying clear and simple. Mr Hester has done a great job in RBS and deserves his bonus which is much lower than other bankers. Do not listen to those who say he can go and somebody else will do the job. Even talented people need time to go through this complex bank.

Hester may well earn less than other bankers in a similar position – but it’s very difficult to have any sympathy in this day and age with anyone struggling to get by on £1m plus a year.

Presumably ‘J’ would be happy to agree that Public Sector workers facing revised pension terms have been’ bullied’ by the government and tabloid press in the same way as Mr Hester. Their positions are very similar, after all.

Let me register my disapproval of the level of bonuses that now appears to be the norm, with little sense of proportion.

The bonus level, with that pay level is ludicrous.

Having said that, it was a contractual arrangement and negotiated by the last mob, gangsters, and it is that same mob, largely responsible for the predicament we now find ourselves in, that are baying about a reduced level of bonus, and 'blackmailing' Hester to giving up what he clearly has earned by his efforts which is resulting in a turnaround of the bank.

Let us not forget who also started paying civil servants bonuses, even for turning up to work when there was snow on the ground!

Hester had a contract, and was given an award pursuant to the contract and that should have been honoured.

May I suggest that Hester will most likely depart the job at the earliest opportunity, next year, because of this and is likely not to work quite so diligently because of the treachery of the left. Clearly he earned the bonus per his contract. I may disagree with the level of the bonus, but he should not have been pilloried for taking a bonus due under his contract.

The fact that the bank is now on the profit path shows that he was discharging his obligations, unlike the top echelons of the former mob did during their time in office.

Let us also remember that most of the top echelon of the opposition should have been prosecuted and jailed for fraud and theft of expenses from the public purse, one of the exceptions being the mealy mouthed Silliband. I also reckon that nearly all of them could be charged for criminal incompetence if one were to properly judge their performance in office.

I think there are two issues here that are in danger of becoming confused.

Firstly, there is the issue of the level of executive pay generally.

Secondly, there is the issue of what Stephen Hester in particular should be paid.

The second issue is really nothing to do with the first one: Mr Hestor has a contract already and the terms of the contract should be honoured. If his contract comes up for renegotiation, then the first point comes back into play.

Then that should be the precedent for Hester...

That he is capable of rational decision making after all.

Hester gave up £1m bonus to avoid 'pariah' status

Once again a banker acting out of self-interest.

'Hester gave up £1m bonus to avoid 'pariah' status

Once again a banker acting out of self-interest.'

Self Preservation.... lol

Odd how all the postings are now in support of him taking the bonus.

I suggest that we acknowledge that he did the decent thing - not many around who do.

Not correct, Tim, and If there was a sense of decency involved here how has it taken Hester so long to realise it ?

He has done what Cameron has probably asked him to do. The problem was getting too big for HMG.

I feel sad about it, I'm sure we could ask some of our decadent OAP's to chip in a bit of their reduced heating allowances to help him.

"there needs to be more of a public service ethos around the vital role in bringing RBS back to health. The point at which RBS returns to the private sector may be the moment for Hester to get his private sector style rewards."

On the contrary, this silly episode should be no more than a curtain-raiser to the full nationalisation of RBS and its transformation into a bank that serves the public, not the casino crowd and its toadies who are shedding tears over greedy Hester's million-pound misfortune in these columns.

RBS's equity should the be distributed in specie to taxpayers so they have permanent, individual reasons to force it to serve the public good, and will share in in any profits that incidentally result. Certificates of ownership should be non-tradable-- no more spivvery. RBS should be a People's Bank run like the Co-op.

And the taking of RBS, maybe Lloyds too, into public ownership-- the only terms on which the harassed taxpayer should have permitted them to survive at all-- should be the first shot in a war to drive swindlers, speculators and the like offshore (good riddance) and cut the financial sector down to its proper size... in an economy it will no longer dog around.

We don't need these complacent bunglers to be 'incentivised' to get us out of the mess they got us into in the first place. We need to show them the door and breed a new kind of banker-- a humble servant of productive industry in a much, much smaller City.

Anyone who thinks Hester is exempt from financial-crisis tarring should look at what happened to British Land's dividend and share price after he'd been running it for some years. He is no innocent victim of political crossfire. And what he is doing now-- sacking hapless staff and flogging off the casino ops for whatever he can get, while failing to lend up to target-- is no work of wizardry either. I could do it.

the older I got the more it became apparent that the majority of people could not do the job they were paid to do. The numbers of people that have the wit and ability to dig a bank out of a £75 billion pound hole is vanishingly small. If Mr Hester can do it he is worth the money. When presented with a problem and a deadline 99% of people cannot solve it - when they see it done it becomes "easy" and "obvious". I worked in the public sector for 20 years - it is full of jobsworths who could not make a critical decision if you paid them a million pounds...Mr Hester was given a set of targets and if he has met them he should be paid the agreed fee. The words pied piper and Hamlin come to mind for some reason.

If you think Hester at RBS got a big bonus, wait a few days and see how much the pigs at the other banks get in their troughs. Especially those at Barclays who have a mail box in a tax haven, registered as their head office.

Listen! No worker works 5000 times harder than any other worker. So why are pay them 5000 as much!! Nice story, @GHLumsten, beat the FT to it today basically.

Dave, PRG?

Franco, what business is it of yours what bonuses Barclays pays unless you are a shareholder?

Anthony English 'I'd only give 50%'. Yes for a mere £1.2m basic salary - not worth getting out of bed for really. It's a sad situation where people believe that level of pay isn't enough to make people do a fair day's work in public service.

Lorraine 'mob rule'. No, owner rule. The owner of the company didn't want to pay its employees the bonuses. It seems fair that the owner can decide how much its employees are paid.

Is he worth £1.2m - I don't know. Is anyone worth that? The prime minister has a far more important job and gets paid a small fraction of that basic pay.

Is he the only one who can do the job? No. If he left tomorrow, there would be plenty of names suggested as people who could do it just as well, maybe better. Stelios makes this very point:

http://www.bbc.co.uk/news/business-16786632

We should limit maximum pay to a multiple of average company pay and say bonuses can't be higher in percentage terms than the average company bonus. Executive pay as a multiple of average earnings has doubled in the last 10 years. Where's the extra performance to justify it? In fact, we've had the opposite.

Does anyone know the detail of the bonus?

was it 1 million pounds worth of shares at today,s price?

an option to purchase at today.s price in the future or what?

the detail defines the true value of the deal seems to me that the value of it has not been defined - obliterated by the baying of the media and the politicians for blood

and call me cynical but I am sure if he did give it up now then there is some back room deal that will restore it to him as soon as the media have gone quiet......

Franco owns Barclays - I sold him my shares as I was so disgusted by Bob the Banker. I also closed my account with them after 40 years. Read the transcript of Bob's (Diamond - where did he get that name!?) talk on Radio 4 in December - it is so hypocritical I don't know how he can look at himself in the mirror.

This episode is over - now lets tackle the tax haven scandals, that's where the real money is hidden - far from the "maddening crowd" of ordinary tax payers.

Sorry to say but if the Government & Employers can break a contract with the Proletariats then they are perfectly within their rights to do the same for Bankers & Fat Cat Executives.

This discussion has a bizarre feel about it that I can't quite describe. The world is trashed, people are being beaten up in every possible way. Our country may not be the same for decades if ever. It feels like a sort of denial or "Let them eat cake " moment.

Just before they started laying off people from local government they took away the redundancy packages that had been agreed. The amounts involved were peanuts compared to these figures and yet represented so much for the redundant over 50's. Perhaps a new start even. So much of this is happening and there is more suffering going on in communities than most can ( or want to ) imagine because of the situation we are in.

How can we even give a passing thought to this mans million quid? He won't lose out you know that.

Some arrangement will have been made in some cosy living room in Oxfordshire, no worry.

The whole problem is that like it or not, we are in a global market with the levels of pay being set be the most obscene, greedy individuals in the USA. There is no way in which we get back to a sensible level of total payment for the job when some in the USA are being paid upwards of $50m - and for what? No-one, but no-one in this world can justify such levels of remuneration. Unfortunately, there is no likelihood of the Americans giving up that sort of payment, so the rest of the world is stuffed. Yes, we could say that we shall return to sanity and go it alone. There is no doubt that many companies would withdraw their operations from the UK - not because it would be good for their shareholders, but it would be best for the finances of those at the top.

The pay levels in Banking are excessive by a magnitude of 10.

Hester's salary should be £50,000

with an annual bonus attached according to performance.

If he did well for the Bank, as he is said to have done, then an additional 75,000 is quite enough.

After all, he may then aspire to running for election as Prime Minister where performance bears no relationship whatsoever to pay.

Look at the teachers and the refuse collectors, they actually work for a living.

The Labour government agreed on the contact with Hester, now purely in a bid to seek approval of public opinion, Ed the Dead is welshing on the agreement. Perhaps he should also renage on the deal for 'Gorbals Mick' ex Speaker of the House and union man, whom after a disasterous time in office was kicked upstairs with a wholly unearned peerage and equally a whopping great pension. Perhaps Ed should also lead a protest seeking MP to pay the tens of thousands they made in the status swapping of their homes scandal, without moving a stick of furniture.

Graham, lovely to hear you right-wingers venting your spleen. Have another read of the tripe you have just written.

Another left wing denial without substance.

This contract. Is it in any way similar to the contracts agreed with millions of OTHER public sector workers which Camera-on has disregarded ?

No. totally different.

1. the coalition government did not sign up fo either. Hester was brought in by Labour to help clear up the financial disaster created by and during Labour's time in office. The pensions were set to keep the unions sweet and a desperate attempt to stay in power. Even one of Labour's own mengven a perage by Labour) brought in by the coalition to cary out a review of public sector pensions concluded that they were unaffordable. Can't' get any better than that.

i was surprised to hear that robert peston was being paid a lot of money, as i rate him very low, and i think he s one of the lefty bbc appointments who can t even talk properly. high payments are a national scandal. what are we all going to do seeing all this diversion of funds from needy tax payers

Not worth bothering with.

sad .........

I couldn't find any comment on this page about Hester's failure to lift the RBS share price out of the doldrums. This is bizarre in view of the fact this is a financial website intended for investors to discuss issues of the day.

It seems political discussion has taken over this site as far as 60% of contributors are concerned.