Motivating RBS's Hester

BBC business editor Robert Peston on rich rewards for banking success

Stephen Hester and other senior RBS executives have today been awarded their allocations in a couple of incentive schemes.

Or to put it another way, they have been given an idea of how much wealthier they will become, if RBS returns to profit in a sustainable way and if RBS's share price responds positively.

In Hester's case, he could become quite a lot better off.

His maximum allocation under RBS's 2010 long term investment plan would be 10.1m shares - which would be his if he hits targets for profits, return to shareholders, risk reduction and strategy.

He will also receive 4.6m "share bank" shares in 2012 and 2013 in respect of his performance last year.

And he could receive a further 6m share bank shares next year depending on how he does this year.

So that's just under 21m shares that will be his, if he turns the bank around.

They are worth £9.1m at today's share price - and would be valued at many millions of pounds more, as and RBS's share price finally breaks above the 50p odd price which taxpayers paid for stock when rescuing the huge bank in 2008.

Which is not a bad reward for someone who arguably works for the public sector (RBS is 81% owned by taxpayers - and the Office of National Statistics includes RBS's liabilities on the public-sector balance sheet).

You can keep up with the latest from business editor Robert Peston by visiting his blog on the BBC News website.

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