Finance Matters

Posts Tagged ‘Stephen Hester’

Politicians would like to think that Stephen Hester’s decision to give up his bonus marks the start of a mass renunciation of “excessive pay” by private sector bosses. It is certainly time the UK corporate and political world moved on …

Lloyds Banking Group has decided to withdraw Halifax and Bank of Scotland charity credit cards at the end of February because it doesn’t consider them a cost-effective way of donating to charity.

The bank has been issuing charity credit cards for over 23 years and they have raised millions of pounds for charities such as Cancer Research UK, the NSPCC and the Scottish SPCA.

In 2009 the Cancer Research UK credit card won Best Charity Card Programme at the Card Awards, an achieved that Lloyds’ was proud to mention in its corporate responsibility report.

Although the charities have expressed disappointment at Lloyds’ decision they say that they hope to explore other opportunities with the bank.

Speaking to Radio 4′s Money Box programme, Baroness Finlay, vice chair of the all-party parliamentary group on cancer, said: “The timing of it doesn’t seem very sensitive given there’s all the furore around bonuses.”

Earlier this month Lloyds Banking Group’s chief executive, António Horta-Osório, announced his decision to forgo his bonus, which could have been worth £2.4m.

Stephen Hester, the chief executive of RBS, was awarded a bonus of nearly £1m earlier this week, but after days of pressure from the public and MPs, he decided last night to hand it back.

Cashflows, which provides business to business financial services, has moved quickly to help fill the gap left by Lloyds’ decision to abandon charity credit cards.

The company, which is part of the Voice Commerce Group, has announced the launch of a charity credit card scheme which will run alongside its existing small business payment support activities in the UK.

Cashflows’ CEO and founder, Nick Ogden, said: “Cashflows is at the forefront of innovation in the financial services industry and we are already supporting many UK SMEs.

“Our card issuing services are able to provide support for charities and in the current economic situation it is vital that we try and support them, whilst they face inevitable cuts in donations across the board.”

LONDON (AP) — Royal Bank of Scotland chief executive Stephen Hester will not be accepting a 1 million pound ($1.5 million) bonus that drew criticism from British public and politicians, the bank said Sunday.

Spokesman David Gaffney said Hester would not receive the bonus of 3.6 million shares he was awarded last week by the board of the largely state-owned bank.

The British government spent 45 billion pounds bailing out RBS three years ago. It still owns an 82 percent stake, and politicians had criticized the reward at a time when Britons face painful spending cuts and tax hikes.

The government — which has insisted it has no control over the bank’s bonuses — welcomed the announcement.

“This is a sensible and welcome decision that enables Stephen Hester to focus on the very important job he has got to do, namely to get back billions of pounds of taxpayers’ money that was put into RBS,” Treasury chief George Osborne said.

The decision follows Saturday’s announcement that RBS chairman Philip Hampton was waiving his own bonus of 1.4 million pounds in shares.

Hester and Hampton were brought in after Fred Goodwin, who led RBS’s ill-fated takeover of Dutch bank ABN Amro, stepped down in October 2008 as the government was spending billions to prop up the bank.

The board of directors decided last week to award Hester a bonus of 3.6 million shares — worth just under 1 million pounds at Friday’s closing share price of 27.74 pence. That came on top of his annual salary of 1.2 million pounds.

Prime Minister David Cameron said Saturday that Hester’s bonus was “a matter for him,” but pointed out it was much less than last year’s.

The government claimed it had no control over bonuses awarded by the bank, and said replacing Hester if he resigned would be more costly than paying the reward.

But many politicians were critical. London Mayor Boris Johnson, a Conservative like Cameron, said he found the bonus “absolutely bewildering.”

Rachel Reeves, Treasury spokeswoman for the opposition Labour Party, said Sunday the sum was inappropriate “when families are feeling the pinch.”

“It’s time the government explained why they have allowed these bonuses to go through unchallenged,” she said.

Before the bank’s announcement, the Labour Party said it would force a vote in the House of Commons next month calling for Hester to be stripped of his bonus.

Please follow Clusterstock on Twitter and Facebook.

Join the conversation about this story »

See Also:

• RBS Chairman ‘Declines’ A Bonus He Likely Wouldn’t Have Gotten Anyway
• Morgan Stanley Executive Follows James Gorman’s Advice And ‘Just Leaves’
• REPORT: Credit Suisse Pay For Senior Bankers Cut By 30%

Royal Bank of Scotland (RBS), which is 83% owned by the taxpayer, has disclosed details of the amount of money it paid to its key staff in 2010. The bank said its 323 key staff were paid a total of £375 million last year – after already divulging its chief executive, Stephen Hester, received a [...]

The Royal Bank of Scotland (RBS) has today revealed its chief executive, Stephen Hester, will receive an extra shares bonus worth up to £4.5 million – taking his total pay package to £7.7 million for 2010. The bank, which is 83% owned by the taxpayer, also unveiled bonus payments for several of its other executives. [...]