Bloomberg News

RBS’s CEO Says Political Scrutiny of Bonus Was ‘Discomforting’

February 08, 2012

Feb. 8 (Bloomberg) -- Royal Bank of Scotland Group Plc Chief Executive Officer Stephen Hester said the political scrutiny of his bonus has been “discomforting to say the least.”

While saying that the spotlight on RBS made the job of turning round the government-controlled lender harder, Hester implored staff to be “purposeful, calm and do our jobs to the best of our ability,” according to an e-mail he sent to employees yesterday obtained by Bloomberg News.

Hester, 51, has been at the center of a political storm since it was announced on Jan. 27 he would get a 963,000-pound ($1.5 million) bonus for 2011 even after shares of the bank slumped. He waived the bonus after the U.K.’s opposition Labour Party said it would seek a Parliamentary vote on the payment.

The government was forced to rescue RBS at the height of the financial crisis, injecting 45.5 billion pounds of taxpayer money into the lender, making it the costliest bailout of any bank in the world. Hester said in the e-mail that the cost of cleaning up the lender he inherited from former CEO Fred Goodwin totals 38 billion pounds so far.

Goodwin was last month stripped of his knighthood, awarded in 2004 for services to banking. He led RBS’s takeover of Amsterdam-based ABN Amro Holding NV in 2007. Goodwin was the “dominant decision maker” at the time of the bank’s collapse, the Cabinet Office said in its decision.

The shares tumbled more than 48 percent last year. The stock rose 0.3 percent yesterday to 28.88 pence in London trading. The U.K., which owns 82 percent of the lender, paid an average of 50.2 pence a share for its holding.

--Editors: Edward Evans, Ben Livesey.

To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net;


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