RBS boss: Parents think I earn too much
RBS boss: Parents think I earn too much
Wednesday 13th January 2010
The chief executive of Royal Bank of Scotland (RBS) has admitted even his own parents believe he is overpaid.Appearing before the Treasury select committee on Tuesday, Stephen Hester defended his bank's pay structure and his own package worth potentially £9.6 million.
Answering questions from MPs, Mr Hester said RBS, which is now 84 per cent owned by the taxpayer, had paved the way for pay reform in the banking sector.
The 49-year-old replaced Sir Fred Goodwin as chief executive of the bank after it was bailed out by the government at the height of the financial crisis in October 2008.
In the evidence session he said he had asked to be paid the "going rate" for his position but claimed the pay package was in fact worth next to nothing due to the fact large parts of bonuses were now being paid in shares and the bank's price stands at a lowly 34.8p.
RBS has seen its share price plummet during the last 18 months, falling 41 per cent in 2009 and 87 per cent in 2008.
Commenting on his pay though, Mr Hester said: "If you ask my mother and father about my pay, they'd say it was too high, as well, so some people close to me have that view of bankers."
The RBS chief said he could not comment on the size of the bonuses due to be paid to his staff before the employees were told themselves, expected to happen next month.
The government has the power to veto the size of bonuses and there has been speculation in recent months the bank's board had threatened to quit if they didn't receive what they were expecting.
Mr Hester though said no-one had threatened to resign and dismissed fears business will move away from London as a result of the new government tax announced by Alistair Darling in his pre-Budget report last month.
He also told MPs the bank was on track to meet its ambitious targets to return to private ownership in the next few years.
Also giving evidence on Tuesday were Eric Daniels, chief executive of Lloyds Banking Group, in which the taxpayer holds a 43 per cent stake, and Gary Hoffman from Northern Rock, as part of the committee's investigation into the pay structures at state-controlled banks.
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