RBS chief 'has no contractual right to bonus'

25 January 2012

The chief executive of the Royal Bank of Scotland (RBS) is not contracted to receive any set bonus on top of his basic salary, it has been revealed.

According to the Independent, Stephen Hester's employment terms with the state-owned financier do not include a clause that permits him to an additional sum as well as his wages.

In addition, it is noted within this document that the Conservative-Liberal Democrat alliance has the power to veto any payments it deems excessive.

These facts, the newspaper indicates, mean that claims made by senior government officials that they have limited influence over the bonus offered to Mr Hester due to the contractual obligations of RBS are "misleading".

Sources within the company also confirmed to the newspaper that any remuneration packages have to be approved by the government at RBS's annual general meeting prior to being made official.

Recently, deputy prime minister Nick Clegg told the BBC he is determined to see changes made in the banking bonus culture sooner rather than later.

By Gary Cooper

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