RBS chief Hester agrees to forego bonus worth almost £1 million

Bowing to intense political and media pressure, Stephen Hester, chief of the UK government bailed-out  Royal Bank of Scotland (RBS) has agreed to forgo his bonus worth almost £1 million.

In a confirmation RBS yesterday said, the chief executive had decided to forgo the 3.6 million shares package worth £963,000 he had been awarded last week.

(See also: RBS chief may get millions of pounds in bonus even as share price falls)

The bonus had come as an embarrassment for the government as Labour pointed to prime minister David Cameron's pledges to clamp down on executive pay and London's Tory mayor Boris Johnson claimed it was "absolutely bewildering" that a state-backed bank should pay out so much.

Welcomiing hester's decision, chancellor George Osborne said, it was a sensible and welcome decision that enabled Hester to focus on the very important job he had to do, namely to get back billions of pounds of taxpayers' money that had been put into RBS.

Labour had planned to force a Commons vote to strip Hester of his bonus while claiming the prime minister's "failure of leadership" could not be allowed to stand. According to party leader Ed Miliband, Hester had done the right thing.