Post date: Jan 30, 2012 4:52:15 PM
The chief executive of Royal Bank of Scotland has decided to waive a bonus worth almost a million pounds ($1.6 million), according to the bank, after the handout angered Britons bearing the brunt of government austerity measures.
UK-RBS - It was a deal that caused outrage amongst politicians, unions and the British taxpayer.
Now RBS boss Stephen Hester says he will no longer accept the share bonus of almost 1 million pounds he was awarded last week.
RBS is majority-owned by the tax-payer, many of whom have had their salaries frozen.
Britain's opposition Labour party had called for a parliamentary debate about the payment.
Party leader Ed Miliband wants to see permanent changes to the bonus culture.
Ed Miliband, leader of the opposition Labour party, saying
"I think it was the threat of that parliamentary vote that led to change but I don't think this can be just a one off episode because if we don't deal with this systematically, if we don't deal with the issue of bankers bonuses in a proper way this kind of thing is just going to reoccur."
Although Hester wasn't at RBS when the bank was bailed out - around 45 billion pounds of taxpayers' money was used to rescue it.
David Buick of BGC partners believes the payment is a fair reward for a difficult job.
David Buick, BGC Partners, saying
"You've got a balance sheet which has got to ridiculous proportions of four years ago of 2.2 trillion pounds which has now been trimmed down by 700 billion pounds and yet he's having to throw people onto the street. Thirty thousand people have probably left the Royal Bank of Scotland's employ in the course of the last four years, that won't have given him much pleasure. It's a horrible horrible job and frankly he's making a hell of a fist of it and I think the political interference is an absolute disgrace."
But critics believe RBS hasn't done enough to help small and medium-sized businesses - it missed its key lending target aimed at helping get the economy moving.
The bank, along with many others, has also seen its share price fall sharply over the past year.
Hayley Platt, Reuters.