RBS chief to forgo bonus amid public outcry

The Royal Bank of Scotland, majority-owned by the British government, Chief Executive Stephen Hester will forgo his bonus for 2009, amid the continuing public uproar against the bankers, a media report said.

Hester would give up his 2009 bonus of more than 1.6 million pounds ($2.5 million),the Financial Times said.

RBS will announce its results later this week.

Hester would forgo his bonus in an effort to 'depoliticise' the RBS bonus issue and help pave way for the UK government to sign off the bank's plans to pay 'commercial rate' of bonuses to its investment banking staff, the report said attributing to people familiar with plan.

Meanwhile, the report said that another British major Lloyds Banking Group is anticipated to award 200 million pounds to its staff and is on a collision course with investors over a bonus for its CEO Eric Daniels.

Hester's move would pile pressure on Daniels, who is yet to make any declaration about his bonus plans.

The UK Treasury and UK Financial Investments, the government body responsible for its bank shareholdings, are set to decide whether to sign off on the proposed bonus pots at RBS and Lloyds this week. The government has a 70 per cent shareholding in RBS, and owns 41 per cent of Lloyds.

RBS plans to pay its bankers about 1.3 billion pounds in bonuses. If the government signs off on the plan, the bank will prepare to pay investment bankers about 28 per cent of revenues, the report noted.