Ross McEwan, the chief executive of Royal Bank of Scotland, said he will forgo £1m out of his remuneration package for 2015, according to reports.
McEwan, who has been at the helm of RBS since 2012, said he will be handing back his "role-based" incentive, a means of payment thought to be used to avoid bonus caps, Sky News reported.
But even after handing back the £1m share McEwan still stands to be paid £2.7m for 2015.
"Ross does not want this issue to be a distraction from the task of building a great bank for customers and shareholders," McEwan said in a statement to Sky News.
RBS is 81% owned by the tax payer.
RBS's shares are trading well below price that was paid to bail out it out - unlike the other government-own bank Lloyds - leaving a gap of some £10bn and a government share sale a distant future prospect.
McEwan also declined to take an annual bonus last year.