RBS chairman waives share award David Cameron, the Prime Minister, this weekend defended Mr Hester's pay. "The fact is Stephen Hester was brought in by the last Government, a contract signed by the last Government to turn round RBS - a bank that had got itself into a complete mess," Mr Cameron said. The Sir Philip's share package was initially agreed with another candidate for the chairman's role who subsequently decided not to take the job. George Osborne, the Chancellor, has also defended RBS's chief executive, claiming that he is paid "a lot less" than his peers at other banks and is successfully shrinking the size of RBS's workforce and liabilities. Others who back Mr Hester stress that it would be difficult to find anyone of similar experience to replace him who are paid a similar amount of money. RBS has increased lending to all businesses in the past year and complied with almost all of its targets under Project Merlin, the deal the big banks struck with the government on pay and lending. In the world of boardroom pay bonus are regarded as an entitlement. Supporters of Mr Hester argue that award would be a public statement by the bank that the executive have failed at a time when he is felt to be turning around the bank. Mr Hester could also receive up to 12 million shares as a bonus for his work in 2012. This would be worth more £3 million, based on the bank's current share price. Lord Oakeshott, the Liberal Democrat peer who last year resigned from his party's front bench claiming the Coalition was too soft on banks, said: "Why on earth didn't Number 10 or the Treasury see this car crash coming?" The peer said the "writing was on the wall" for the Coalition when Antonio Horta-Osorio, the chief executive of Lloyds Banking Group, the other major majority state-owned bank, decided to waive his bonus two weeks ago. This is weak leadership all round. Cameron and [George] Osborne for cowering behind Labour's bonus contract and Mr Hester if he collects it. The Prime Minister must have a very high blood boiling point on top pay if he won't block a million-pound bonus for failure. Sir Philip, a keen sailor, joined RBS in January 2009. He has previously been chairman of J Sainsbury and group finance director of Lloyds TSB, British Telecom, British Gas and British Steel. He was knighted in 2007.