Wednesday, according to reports, Royal Bank of Scotland Group Plc's (RBS, RBS.L) Chief Executive Officer Stephen Hester would hold shares promised under GBP 9.74 million pay plan for an extra two years. The maximum share award would only be granted if RBS's share price rose above 70 pence, reports stated.
Hester's compensation package includes an annual salary of GBP 1.2 million and stock awards of as much as GBP 6.5 million, including options. Under the original deal, Hester couldn't cash in any of the shares until three years after their award. In the amended package, he will have to wait five years to redeem the shares.
This action was taken after shareholders were angered by the huge pay package announced by the company amid the economic conditions. The U.K. government has a 70% stake in RBS.
The company is already in the process of selling assets and cutting lending in order to return to profitability. The bank reported the biggest loss in British corporate history for 2008, posting an after-tax loss of GBP 7.9 billion on a pro forma basis. The bank also recorded goodwill write-downs of GBP 16.2 billion relating to its previous acquisitions, mainly ABN AMRO. RBS has also slashed its workforce by about 12,000 jobs this year.
RBS closed Wednesday's regular trading session at $12.87, up $0.10 on a volume of 0.21 million shares, lower than the three-month average volume of 0.64 million shares.
On the London Stock Exchange, RBS.L closed Wednesday's regular trading session at 39.40 pence, up 0.76 pence or 1.98% on a volume of 23.57 million shares.
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