The Royal Bank of Scotland, Britain's largest government-owned bank, said Tuesday Chief Executive Stephen Hester has been awarded a shares bonus currently valued at 4.5 million pounds ($7.2 million) under a long-term incentive plan.
Hester's award comes on top of his 1.2 million pound salary and an already-announced 2 million pound annual bonus, bringing his potential compensation for 2010 to 7.7 million pounds.
Bonuses are a hot topic in Britain, where the country's "Big Four" banks _ Barclays, RBS, Lloyds Banking Group and HSBC _ agreed last month with the government to rein in bonuses _ but that deal has been criticized for its lack of enforcement.
RBS's disclosure Tuesday follows a similar filing from Barclays PLC, which said a day earlier that its new chief executive, Bob Diamond, received a 6.5 million pound ($10.6 million) bonus for his performance last year _ less than anticipated but a still a hefty payout as pressure grows on banks to support Britain's struggling economy. Diamond received 1.8 million pounds in shares and a 4.7 million pound deferred incentive award.
Diamond, who was chief executive of Barclays Capital, the lender's investment banking arm, before taking over from former CEO John Varley at the start of 2011, received a 250,000 pound base salary in 2010. His total pay package for 2010 overtook his peer at HSBC, Stuart Gulliver, who received combined pay of 6.2 million pounds, including bonus.
Trade union Unite was quick to condemn RBS's disclosure, calling the bonus "a disgrace."
"While most taxpayers continue to suffer during tough economic times the top bankers at RBS, and yesterday at Barclays, celebrate their ludicrous bonuses," the union's general secretary, Len McCluskey, said. "While everyone else is worried about paying their household bills, these people are counting their bundles of cash."
RBS, which is 83 percent taxpayer owned after accepting a 45 billion pound state bailout at the height of the credit crisis in 2008, last month missed analysts' expectations with a 1.1 billion pound full-year loss despite returning to profit in the final quarter of the year. At the time, RBS said its recovery from the crisis was ahead of schedule.
Hester has been granted 10.1 million shares for 2010 _ contingent upon a number of performance conditions _ that won't vest for three years, RBS said Tuesday. The shares will vest in two equal tranches, in March 2012 and March 2013, and Hester has agreed not to cash out any of the shares until at least one year after the vesting periods.
RBS added that Hester is eligible to receive six million shares as a 2011 bonus.