Stephen Hester rejects £1m RBS bonus

By Neal Wallace

Stephen Hester, the chief executive of the Royal Bank of Scotland, has turned down his controversial £1 million bonus.

According to the BBC's business editor, Robert Peston, Mr Hester was set to renounce the £963,000 shares-only payment after succumbing to "enormous political pressure", while chancellor George Osborne said that it was a "sensible and welcome" decision.

Earlier, Labour had said that it would force a vote on the issue after prime minister David Cameron refused to block the bonus, despite RBS being the UK's most publicly owned bank.

Mr Peston said that "it would have [been] a great mistake for the semi-nationalised bank to fight parliament to preserve rewards for its chief executive seen by many as excessive".

It was expected that MPs would vote against the payment, and, as such, it would have made it untenable for him to pocket it, he continued.

RBS chairman Philip Hampton recently gave up a £1.4 million bonus he was awarded in shares.