Ross McEwan, the incoming chief executive of the Royal Bank of Scotland (RBS), will not receive a bonus for any of his work in 2013 or 2014.
He is currently the head of the bank's retail arm and will take up his new position in October 2013 with a £1 million ($1.5 million) salary.
The current chief executive Stephen Hester will be stepping down to make way for Mr McEwan and has told analysts he is impressed by his detailed operational and customer-focused skills as well as his leadership qualities, BBC News reports.
RBS announced Mr McEwan's appointment as it reported pre-tax profits of £1.4 billion in the first half of 2013, up from the loss of £1.7 billion in the previous year.
However, the institution's share price was hit as investors showed their disappointment over a lack of further improvements.
The government has a large stake in RBS and bonuses have typically been restricted since the bank was bailed out during the financial crisis.
By Asim Shah