LONDON (Reuters) - Politicians from across the spectrum united in condemning the near one million pound bonus awarded to RBS chief Stephen Hester, with Deputy Prime Minister Nick Clegg saying the public sees such sums as "from another planet."
The size of the boss's bonus at a bank 82-percent-owned by the taxpayer has been seized on by opponents seeking to discredit Prime Minister David Cameron's claims that he understands the pain of austerity to ordinary Britons.
But even the coalition's Conservatives and Liberal Democrats were joining the chorus of disapproval on Friday.
Boris Johnson, the Conservative mayor of London, said he was "bewildered" by the bonus.
"RBS occupies the same status in the economy as Gosbank did in the Soviet Union. It's a state owned bank. So the idea that this is not in the control of the government seems to me to be far-fetched," he told BBC News.
Clegg said the government's hands were tied by Hester's contract, drawn up before his Liberal Democrats came to power last year in alliance with the Conservatives.
"I have a huge amount of sympathy about people's sense of dismay when they see these figures that seem from another planet," Clegg told Sky News.
Jeremy Browne, a Liberal Democrat Foreign Office Minister, said Hester should consider rejecting the bonus, following the decision by Antonio Horta-Osorio, the chief executive of rival part-nationalised bank Lloyds, to waive his bonus after he spent time off work sick.
"He is working for a company which is five-sixths owned by us, the taxpayer, and I think he has to think like a public servant, not like someone who's there to line their own pocket," he told BBC TV's Question Time panel show late on Thursday.
Hester, appointed in October 2008 to fix the bank, has yet to comment. Although the bonus was half the size of his award last year and will be deferred, it is likely to take his overall pay for 2011 to over 2 million pounds.
Taxpayers poured in billions of pounds in cash and state guarantees to save Royal Bank of Scotland in the financial crisis.
The government stressed the bank was run at "arms-length" from ministers and that it has made good progress since its rescue.
"(Hester) was hired after the crash to sort out the problems at RBS. He was asked to shrink, by my predecessor, the size of the balance sheet, the size of its workforce," said Conservative finance minister George Osborne, speaking at the Davos economic forum in Switzerland.
"He is doing those things, and in the end, according to the arrangements we've created, it's got to be up to the board to make the decision on the bonus he receives," Osborne added.
Critics say the bank has not lent enough to small businesses under a deal with the government that linked senior executive bonuses to meeting certain lending targets.
"Mr Hester's bonus is a slap in the face for thousands of small businesses struggling to get the finance they need," said Labour business spokesman Chuka Ummuna.
"RBS missed its lending target in the third quarter of last year and net lending to businesses by the country's banks fell in nine out of the last 12 months," he added.
RBS said it had met its target in terms of lending to British businesses overall, but had missed its target on lending to smaller companies by just 1 percent.
The bank's board said the all-share bonus reflected "the substantial progress in making RBS safer, rebuilding performance in many businesses and improving customer service and support."