Hester completes RBS clear-out as last Goodwin lieutenant stands down

Gordon Pell is the latest RBS director to retire with a huge pension
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The Independent Online

Royal Bank of Scotland has completed the total clear-out of the executive members of the board who steered it through the takeover of Dutch rival ABN Amro and the subsequent descent into financial turmoil last year.

Stephen Hester, who succeeded Sir Fred Goodwin as RBS chief executive last November, shortly after the Government was forced to bail out RBS, said yesterday that he had appointed a replacement for Gordon Pell, the only director whose role has until now remained unchanged from the previous regime.

Brian Hartzer, who is currently a senior executive at the Australasian bank ANZ, is to join RBS in order to take on Mr Pell's duties as head of its retail banking and wealth management businesses. Mr Pell will, for now, remain RBS's deputy chief executive, but he is expected to retire early in the new year.

Mr Pell's replacement follows the announcement on Tuesday that Guy Whittaker, who was appointed by Sir Fred as finance director in 2006, is to leave the bank later this year.

The two men are the only executive directors on the RBS board who pre-date Mr Hester's appointment. Johnny Cameron, the corporate banking chief whose division racked up big losses last year, stood down in October, while Mark Fisher, who ran ABN Amro following RBS's ill-fated acquisition of the bank, left at the same time as Sir Fred.

Larry Fish, chairman of RBS's US subsidiary Citizens Financial, stepped down at the end of last year before Sir Tom McKillop, RBS's chairman, quit in February.

The blood-letting has also extended to RBS's executive committee, the group of senior executives that sits just below the main board.

Mr Hester yesterday announced two new appointments within the committee, with Paul Geddes, chief executive of UK retail, becoming chief executive of RBS Insurance, and Chris Sullivan, the incumbent insurance boss, moving to head the bank's UK corporate banking unit. The shake-up means seven of the nine executive committee members have been appointed in the past 14 months.

Mr Hester said the appointments meant he had "assembled the tools to do the job", but warned that he expected RBS's recovery to take as long as five years.

He added: "The journey to standalone strength is a three- to five-year one, with tough restructuring to execute against an inclement economic backdrop."

Mr Hester is keen to draw a line under the controversies that have dogged RBS in recent months, but may be hampered by continuing protests over the rewards granted to executives perceived to have played a role in the bank's downfall.

Mr Pell is expected to retire on a pension worth just over £500,000 a year, not far off the £700,000 deal granted to Sir Fred, which provoked fury when it emerged earlier this year. Larry Fish, meanwhile, remains in the US, drawing a £1.4m annual pension from RBS.

Johnny Cameron, who is taking a pension of £62,000 a year from RBS, has also been the target of some criticism, with the Financial Services Authority, the chief City watchdog, last month questioning his suitability to join the investment banking firm Greenhill. Talks between the two parties reportedly ended after the FSA's intervention.

Sir Tom McKillop has also continued to attract awkward headlines since leaving RBS, having last month been forced to say he would not seek re-election as a non-executive director of the oil giant BP after protests against him there.