Details of the initiative were included in the bankâs annual report for 2009.
The long-term incentive scheme will be linked to the firmâs economic performance over a three-year period and could see top executives awarded with more than four times their salary.
Proposals will be put before shareholders at the financial institutionâs annual meeting in April.
Colin Buchanan, chairman of the RBS Remuneration Committee, said in the report that the bank is fully aware of public scrutiny of banker payments, especially in light of the Â£3.6 billion loss it posted for 2009.
âWe are trying to react to this responsibly, but if the staff needed to restore the groupâs fortunes feel they will be treated worse than at competitors, we will fail to retain or recruit and thereby fail in our turnaround goals for RBS,â he explained.
Mr Hester chose to forfeit his bonus for 2009 in an attempt to diffuse public and media outrage at the size of bonus packages provided to many top bankers.
By Jim Ottewill