- RBS also set to confirm it awarded Hester £1.7million in shares last March
- Hester’s total pay over five years will hit around £13million
Former Royal Bank of Scotland boss Stephen Hester is on course for a final payout from the bailed-out organisation of up to £500,000 – more than two years after he left.
RBS will also confirm next month that it awarded Hester £1.7 million in shares last March under a previous incentive plan, taking his total pay for five years at the helm to around £13 million.
The payouts come despite an expected eighth year of losses at the Edinburgh-based bank and with the taxpayer’s stake worth less than half the amount the Treasury paid for it.
By Alex Hawkes Financial Mail On Sunday
Hester is the beneficiary of long-term incentive plans put in place before he was ousted as chief executive in June 2013.
RBS’s last annual report revealed that Hester had received an £859,000 share award under the 2011 long-term incentive plan.
The report also said that executives benefiting from the 2012 plan had met enough performance conditions to be awarded almost two-thirds of the maximum number of shares they had been allocated.
For Hester that meant picking up 480,000 shares worth £1.7 million. The bank is expected to confirm the payout in this year’s annual report due next month.
He will receive a final allocation of up to 323,000 shares in March as part of the 2013 plan. Indications from last year’s annual report suggest that executives benefiting from the 2013 plan will get similar allocations to last year – meaning Hester will collect 200,000 shares worth £480,000.
He earned an annual salary of £1.6 million at RBS, took one £2 million bonus and picked up £3 million from the long-term pay plans.
The bank’s pay packages are less controversial than they once were. Top executives are not paid bonuses any longer and chief executive Ross McEwan has given share-based allowances – awarded to him by the board and approved by shareholders – to charity. The bank’s bonus pool this year is nevertheless expected to run into hundreds of millions of pounds.
Both the bank and Hester declined to comment.
Meanwhile, RBS is facing a fresh legal attack in the Far East from Taiwanese shipping magnate Hsin Chi Su – widely known as Nobu Su.
Su, whose TMT shipping group was a customer of RBS in the years leading up to the crisis, filed a claim last week in the Singaporean High Court alleging that RBS temporarily transferred more than $400 million (£276 million) from his company to an account in New York without his permission.
Su claims the move was carried out so RBS could use the money as collateral to help access low-cost loans from the New York Federal Reserve.
His multi-billion dollar business came close to collapse during the financial crisis.
RBS declined to comment.