RBS bows to pressure over chief's bonus

Royal Bank of Scotland (RBS) has given in to pressure over the bonuses it pays to its top staff and has slashed its chief executive's 2011 bonus to £963,000.

Heeding both political and public pressure to curb payouts at the state-rescued bank, RBS last night took the decision to cut back Stephen Hester's bonus, however it ignored calls to axe bonuses altogether.

RBS, which is 83% owned by the UK government following its bailout during the credit crisis, allocated chief executive Hester a 2011 annual performance award of 3.6 million shares.

RBS said the award was worth £963,000 based on its closing share price of 26.75p when it decided the bonus payout earlier this week.

The bonus is down from Hester's share-based bonus worth £2 million, paid out in 2010, and the bank boss' 2011 payout will also be deferred. Hester (pictured) will not be able to cash in his shares until late 2014.