The bonus - significant for normal people, pocket change for bankers - was waived following calls by the opposition to hold a vote in parliament on the payout. The CEO backed down. The good news is that the banker did back down but this still means that there's nothing stopping the payout happening in the future. These events have a way of slipping back in later if there's no law preventing it from happening. Good for Labour to make this a public issue. Bloomberg:
Royal Bank of Scotland Group Plc Chief Executive Officer Stephen Hester decided to waive his 963,000-pound ($1.5 million) bonus after the opposition Labour Party said it would ask Parliament to vote on the award. Hester, 51, has been at the center of a political storm over executive pay since the announcement on Jan. 27 that he would receive a bonus for 2011 on top of his 1.2 million-pound salary. Britain’s biggest taxpayer-controlled bank has fallen 35 percent in the past year to about half what the government paid for its stake in the lender. Chairman Philip Hampton has also waived his 1.4 million-pound stock award. “While nobody doubts Hester has done a decent job, there are grounds for real doubt about whether this really justifies a bonus which practically doubles his salary,” Labour leader Ed Miliband wrote on his website last night. “Labour was right to seek a parliamentary vote on this so that the people’s voice could be heard. But the debate about fair executive pay and responsible capitalism is only just beginning.”
