Ex Abbey National FD, Hester, given tougher targets at RBS
Chief exec at Royal Bank of Scotland given tougher targets and may not be paid bonus for five years
Stephen Hester, the chief executive of the Royal Bank of Scotland has been
given tougher performance targets in order to make his bonus as the incentive
debate continues to come under scrutiny.
Next year, Hester will have to hit goals on profitability as well as other
measures and not just RBS share price targets to achieve his bonus, the
Financial Times reported.
Hester, a former Abbey National group finance director, will receive his
£9.6m pay-out if he can double the share price of the bank to 70p in the next
three years. The CEO has also opted to defer payment by a further two years
resulting in a total of five years before receiving the bonus.
The news came as UK Financial Investments, the government body which manages
the state owned 70% share in the bank, published its annual report this week.
UKFI wants the share price target that underlines incentive schemes to evolve
into a less crude structure.
RBS has said it is reviewing its remuneration policies and would consult all
parties including UKFI before the end of the year.
Hester joined Abbey National as group finance director in 2002 and has
previously taken up capital market and corporate finance roles at Credit Suisse
First Boston in 1982.
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