LONDON (ShareCast) - Stephen Hester, Royal Bank of Scotland (LSE: RBS.L - news) 's new chief executive, has deferred part of his
pay package to appease criticism of the £9.6m deal.
Hester will earn an annual salary of £1.2m, receive a projected £2m of annual non-cash bonus payments and up to a further £6.4m through share awards linked to performance.
Hester had originally been eligible to sell shares awarded under the plan in 2012, but this has now been extended to 2014.
The maximum share £6.4m grant would only be achievable if the RBS share price passed a threshold of 70p, with trigger points up to that level also based on the price performance of the shares.
The bank said it recognised that Hester's remuneration needed to be better linked to the bank's longer term performance.
The Association of British Insurers welcomed the decision. ABI director of investment affairs, Peter Montagnon, said it was a "significant" development.
"Large awards are fine if real value is created, but it must have a sustainable and long-term focus," he added.
Hester was appointed chief executive of RBS in November, when bank was bailed-out by the government. The UK government owns 70% of the bank.
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