The boss of the taxpayer-funded Royal Bank of Scotland (RBS) will be paid a bonus of almost £800,000 just days after his bank was fined £391m for rate-rigging. Stephen Hester, chief executive of RBS, will be given about £780,000 in shares next month as part of a reward scheme for his performance in 2010. Mr Hester will be handed the shares next month, and will be able to cash them 12 months later. The exact value will depend on the share price when he cashes them in. Mr Hester said last week he would stay to “finish the job” at the bank despite evidence from US and UK authorities over its role in the Libor scandal, dating back to 2006 and continuing till late 2010 – when investigations had already begun. [The Scotsman]

Barclays is preparing to cut at least £2bn from its annual cost base of £20bn as part of a strategic overhaul to be presented by the bank on Tuesday, say bank insiders and analysts. The cuts are to focus on a retrenchment from some of Barclays’ investment banking operations in Asia, particularly its equities franchise, as well as a partial wind-down of retail and commercial banking in parts of Europe, such as Italy, bankers said. As many as 2,000 jobs are set to go in the investment bank, with many thousands more at risk in other areas, under plans to be unveiled by Antony Jenkins, chief executive. [Financial Times]

Local government pension funds are reviewing their investments in tobacco companies. They are being encouraged to do so by leading health bodies, which, in advance of April’s transfer of public health duties from the NHS to councils, are worried about a conflict of interest. About £1.7bn is invested in tobacco companies by local government pension schemes. Under the changes, about 5,000 NHS staff will move over. Councils will be handed £5.45bn initially to promote healthier lifestyles and later are set to be paid a premium for helping smokers to quit. [The Times]

Hardly anyone’s heard of Brock Gill. That’s no big surprise. He’s spent much of the past seven years building a mine in Mongolia. But he could be about to see much more of the limelight. Gill is planning to be the next chief executive of that internecine war zone otherwise known as Bumi – if, that is, Nat Rothschild really can win the EGM on Thursday week seeking to sack 12 of the Indonesian coal miner’s 14 directors. [The Telegraph]

The Government risks damaging Britain’s economic recovery unless it lifts immigration restrictions, ditches plans to tighten capital rules and adopts a more Germanic approach to business, some of the UK’s major growth companies say. The stark warning, contained in a report seen by The Daily Telegraph, has been handed down by the British Venture Capital Association, which counts private equity firms KKR and Carlyle and businesses from Foxtons to Phones4U among its members. The BVCA argues that addressing the need for growth had become much more “urgent” than spending cuts. “The UK’s fiscal position remains precarious so there is a limit to what stimulus can be delivered without adding to an already large debt burden,” said Robert Easton, BVCA chairman. [The Telegraph]

The super-rich – the top 1% of earners – now pocket 10p in every pound of income paid in Britain, while the poorest half of the population take home only 18p of every pound between them, according to a report published this week by the Resolution Foundation thinktank, which reveals the widening gap between those at the very top and the rest of society. Inequality has grown sharply over the past 15 years, according to Resolution’s analysis: the top 1% of earners have seen their slice of the pie increase from 7% in the mid-1990s to 10% today, while the bottom half have seen their share drop from 19% to 18%. [The Guardian]

A radical new option for the financial rescue of Cyprus would force losses on uninsured depositors in Cypriot banks, as well as investors in the country’s sovereign bonds, according to a confidential memorandum prepared ahead of Monday’s meeting of eurozone finance ministers. The proposal for a “bail-in” of investors and depositors, and drastic shrinking of the Cypriot banking sector, is one of three options put forward as alternatives to a full-scale bailout. The ministers are trying to agree a rescue plan by March, to follow the presidential elections in Cyprus later this month. [Financial Times]

The internal risk controls of banks and financial firms will be overhauled by a radical new industry code of conduct that aims to prevent a recurrence of the rogue trading and interest-rate fixing scandals that have gravely damaged the reputation of the City of London in recent years. Internal auditors will be given far greater powers under the new code, and will report to chairmen rather than chief executives to safeguard their independence. A draft version of the new code, which has been drawn up by the Chartered Institute of Internal Auditors (IIA) with input from regulators at the Bank of England and the Financial Services Authority, is published today and promises “significant change” for the internal auditing processes of financial firms. [The Independent]