Ply your 'talent' elsewhere...

As insulting as a nearly £1 million bonus for a fat-cat banker may seem to workers denied any kind of pay rise, the real situation is worse still.

Hester's handout, which is allocated entirely in RBS shares - 3.6 million to be precise - is calculated at £963,000 on the basis of an all-time low share price of about 27p.

Prior to the bank's collapse, caused by its irresponsible gambling in the sub-prime property market and rash purchase of the Dutch bank ABN Amro, its shares stood at £3.70 each.

While RBS is unlikely to see a speedy return to such heights, neither can a gradual increase in the share price be excluded, meaning that, when he has held these shares for a year or two, he can cash them in for an even bigger bonanza.

And, of course, this bonus is chicken feed compared with another financial drip feed known as the long-term incentive plan, which could be worth as much as £4.8m.

Add in Hester's annual pension contribution of £420,000 and the least he is likely to receive for last year's efforts is £7.38m, making a total of £27.5m since being appointed by the Labour government in October 2008 after it bailed out the private bank to the tune of £45 billion.

Government spin doctors suggest that ministers have kept the RBS chief executive's bonus down to about 60 per cent of what it would have been but for their intervention. They claim that Hester's contract, agreed by Gordon Brown and Alistair Darling, ties their hands over the award.

Neither of these assertions holds water. The RBS remuneration committee is rumoured to have been considering a bonus of £1.5m for its chief executive, but it must have been aware of ministerial policy declarations.

Who knows if that £1.5m figure arose in anticipation of meeting the Tory 60 per cent fig leaf?

Nor is there clarity over government insistence that Hester's bonus is written into his contract.

According to former Labour financial services secretary Lord Myners, no RBS director has a contractual bonus guarantee.

"All matters relating to bonuses are at the full discretion of the board of directors and the shareholders, including UKFI, who have elected them."

Cameron's spokesman all but confirms what Myners says, explaining that Hester's contract stipulates that he is "entitled to be considered for a bonus in good faith."

The RBS remuneration committee and UK Financial Investments, which manages our interest in bailed-out private banks, could have considered the case for a bonus in good faith and rejected it.

The government had a duty then to rectify the situation and failed to do so because its criticism of the City - its party's paymasters - is for political image purposes only. It is cosmetic.

RBS chairman Philip Hampton tugs at the heart strings, reminding us that Hester "played no part" in the bank's collapse.

Neither did the rest of us, but we and 21,000 sacked RBS workers are all being skinned alive to pay for the crisis triggered by bankers' greed.

There is no justification for these excessive payments to a contracted public-sector worker. If they don't like income moderation, let them peddle their special talents elsewhere.