Wednesday July 1, 06:34 PM
UPDATE 1-RBS CEO to hold share award for extra 2 years
By Steve Slater
LONDON, July 1 (Reuters) - Royal Bank of Scotland Chief Executive Stephen Hester has pledged to keep shares worth up to 3.4 million pounds for an extra two years in a move to deflect critics of his controversial pay package.
Hester's overall package is potentially worth 9.7 million pounds ($16 million), RBS (LSE: RBS.L - news) said last week, drawing censure from politicians and trade unions that the payout was excessive for a bank 70 percent owned by the UK government.
The move brings the award into line with a suggestion from the Association of British Insurers (ABI) last week, and the ABI welcomed the move.
The package includes a medium-term share (MTIP) award worth 3.4 million pounds if RBS shares hit 70 pence, which would be paid in respect of 2009 but only claimable after three years, and now effectively deferred for five years.
'This is a significant and welcome development,' said Peter Montagnon, Director of Investment Affairs for the ABI.
'Large awards are fine if real value is created, but it must have a sustainable and long-term focus,' Montagnon said.
RBS's shares need to top 70 pence for Hester to receive the full award. The shares closed on Wednesday at 39.4 pence, up 2 percent on the day.
(Editing by David Cowell) ($1=.6083 Pound) Keywords: RBS/HESTER
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