(CNN) -- The Royal Bank of Scotland is set to give chief executive Stephen Hester a $15.8 million pay package, according to reports.
RBS chief executive Stephen Hester says conditions will remain difficult for the next two years.
The bank won the backing of UK Financial Investments -- the government body which owns a 70 percent stake in the bank -- for the pay deal last week, the Financial Times newspaper reported Monday.
The government took the stake after RBS reported a record loss for 2008 of $34.6 billion.
Hester's package will include nearly $2 million in salary, a projected $3.3 million of annual non-cash bonus payments and close to $10.5 million of long-term share and stock option awards, the FT reported.
The maximum share grant would only be made if the RBS share price passed a threshold of 70p. On Monday it opened at 37p -- the government acquired its stake at 50p.
In a precedent setting move, Hester's contract also includes a "no rewards for failure" clause.
RBS told CNN it would not comment on the FT report.
Hester was employed in November to replace Fred Goodwin, who has been widely blamed by politicians and pundits for RBS's heavy losses and leading a culture of excess.
Goodwin provoked further anger when it was revealed he would receive an estimated pension of around $900,000 a year for life. Last week he agreed to take a voluntary cut in his pension, which would see his annual payout drop by a third.
Since joining the bank Hester has moved quickly to slash costs, announcing plans to cut 9,000 staff and save $3.7 billion over the next three years.
He has warned that conditions will remain tough for at least the next two years.