RBS pledges Hester will stay to 2014
Chairman reassures investors that chief executive will lead the bank until Government share sale
Mark Leftly is political correspondent at The Independent on Sunday and associate business editor across the Independent titles. He writes a weekly column, Parliamentary Business, published on a Wednesday, that covers politics and the City. He is a multi-award winning reporter and was named Press Gazette's business magazine journalist of the year prior to joining The Independent on Sunday.
Sunday 03 February 2013
Royal Bank of Scotland chairman Sir Philip Hampton has moved to calm investor fears over chief executive Stephen Hester's future, privately pledging that the 52-year-old will stay in charge well into 2014.
The news emerges as Mr Hester comes under pressure as bankers are set to be paid £250m in bonuses despite a likely £500m fine for the group's role in the in the Libor-rate rigging scandal.
Shareholders had already been concerned that Mr Hester could leave RBS before the sale of the taxpayer's 82 per cent stake in the bank, following the public furore over a £1m bonus last year.
Mr Hester was badly hurt by the criticism, claiming to have come "within inches of quitting", and told staff that the attention made the job of reviving the bank "harder".
He eventually declined the near-£1m pay-out – an amount London Mayor Boris Johnson attacked as "absolutely bewildering" – even though the board felt that he had earned the money by making the bank a safer institution in which to invest.
The RBS boss is considered by many investors to be the main force behind the bank's turnaround in fortunes. At the current trajectory of RBS's share-price recovery, the Government could break even, or even make a profit, if it sold the bail-out shares in the next 18 months.
A leading RBS investor said that Sir Philip recently insisted that Mr Hester will be around until the middle of next year, which should allow him enough time to oversee a settled sale of the Government's huge RBS stake.
This could also be the ideal timeframe for the former Financial Services Authority boss, Sir Hector Sants, to take over at RBS, a rumour that swept the City recently. Sir Hector is currently easing his way back into the private sector with a head of compliance and regulatory relations role at Barclays.
A second shareholder said that the comments came as a relief.
He added: "When there was all the outcry [over the bonus], we were saying 'No! We need him'. OK, the money was a lot in the real world, but it is low for the job he's doing and the Government will know that Barack Obama got political capital out of making a profit from selling stakes in the banks."
Mr Hester said he would wave his 2012 bonus in the wake of a technical glitch at RBS's NatWest subsidiary in June that left customers unable to withdraw cash. However, he is still eligible for millions of pounds in deferred bonuses.
- 1 Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
- 2 Tom Cruise: Reporters banned from asking actor about Scientology
- 3 A-level results 2015: UK exam board OCR admits it 'estimates' hundreds of pupils' grades after papers 'go missing'
- 4 Dutch King Willem-Alexander declares the end of the welfare state
- 5 Giant Minion terrorises drivers in Ireland as 40ft inflatable blocks traffic on Dublin road
Edward Heath 'raped 12 year-old boy at Mayfair flat'
Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
'Gene drive': Scientists sound alarm over supercharged GM organisms which could spread in the wild and cause environmental disasters
Labour leadership race: Jeremy Corbyn could be the next Prime Minister, says Ken Clarke
Tom Cruise: Reporters banned from asking actor about Scientology
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Chris Leslie: Jeremy Corbyn's anti-austerity agenda will harm the poor, says Labour shadow Chancellor
Landlords renting properties to illegal immigrants to face up to five years in prison
While we fixate on Calais, the Home Office is quietly deporting dozens of migrants on 'ghost flights'
Calais crisis: The seven claims made about the migrants - and the reality
iJobs Money & Business
£35 - £50k DOE: Guru Careers: A Tax Manager / Accountant (ACA / CA / CTA) is n...
£35000 - £37000 per annum + benefits: Ashdown Group: Contracts Executive - Cit...
£20000 - £25000 per annum + OTE £45K: SThree: SThree Group have been well esta...
£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...