RBS pledges Hester will stay to 2014
Chairman reassures investors that chief executive will lead the bank until Government share sale
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.
-
Saudi celebrity preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
-
Meet Rex: the $1m bionic man with working heart, set of lungs and human face
-
World news in pictures
-
MPs vote for gay marriage bill by 400 to 175 in face of widespread Tory rebellion
-
17-year-old girl left brain damaged, blind and paralysed after smoking synthetic marijuana and suffering a series of strokes
- 1 Saudi celebrity preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 2 Meet Rex: the $1m bionic man with working heart, set of lungs and human face
- 3 150 armed officers stand guard outside court as Dale Cregan appears accused of murdering two Manchester policewomen
- 4 MPs vote for gay marriage bill by 400 to 175 in face of widespread Tory rebellion
- 5 17-year-old girl left brain damaged, blind and paralysed after smoking synthetic marijuana and suffering a series of strokes
See in Chinese New Year
Celebrate Chinese New Year with Amoy and win a luxury trip to Hong Kong.
Win a spectacular 10-day holiday to New York State
This is your chance to win the New York State Adventure of a lifetime.
Win a five-star York break for two
Enjoy a luxury two-day stay in gorgeous York, at the five-star Cedar Court Grand Hotel and Spa.
Win a fabulous 12-night US holiday for two
Take the Great American Road trip across Virginia, Maryland and Washington, DC
Enter the latest Independent competitions
Win anything from gadgets to five-star holidays on our competitions and offers page.
Business videos from commercial thought leaders
Watch the best in the business world give their insights into the world of business.
Comments