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RBS boss Stephen Hester waives bonus: reaction

The boss of Royal Bank of Scotland, Stephen Hester, has bowed to intense public and political pressure and given up a bonus worth almost £1m. Hester’s decision came after Labour triggered a Commons vote on the controversial award from the 82%-state owned bank

The boss of Royal Bank of Scotland, Stephen Hester, has bowed to intense public and political pressure and given up a bonus worth almost £1m. Hester’s decision came after Labour triggered a Commons vote on the controversial award from the 82%-state owned bank.

Hester’s decision which emerged late last night while he was on holiday in Switzerland sparked some last minute re-writing from Fleet Street’s finest with the Sun coming up with the headline ‘Hester la vista, bonus’. Here’s a full round up of the latest reaction.

Labour leader Ed Miliband was first out the blocks to applaud the banker. “Stephen Hester has done the right thing. It is a shame out-of-touch David Cameron did not realise he should also do the right thing,” he said.”Labour was right to seek a parliamentary vote on this so that the people’s voice could be heard. But the debate about fair executive pay and responsible capitalism is only just beginning. We need a government that will tax bankers’ bonuses and bring responsibility to the boardroom.”

George Osborne, the chancellor, said: “This is a sensible and welcome decision that enables Stephen Hester to focus on the very important job he has got to do, namely to get back billions of pounds of taxpayers’ money that was put into RBS.”

Shadow business secretary Chuka Umunna said Hester was already getting enough money. “He received £1.2m a year – that’s 46 times the average salary of an average employee in this country – to do that job,” he said. “Usually you receive a bonus when you’ve done something above and beyond – exceptional, extraordinary. But many of the things that have been cited in terms of things that he’s done for the bank are things that you would expect him to do.”

Liberal Democrat peer Lord Oakeshott tweeted this on Sunday night.

He told the BBC on Monday morning: “I’m glad that eventually Stephen Hester has seen sense and seen the outrage of most people in this country, and Lib Dems who have been complaining bitterly about this for weeks.

“I’m very sorry that David Cameron and George Osborne didn’t see that, and have been defending the indefensible right up to today.”

Veteran City commentator David Buik, of brokers BGC Partners, said: “I think last night’s announcement was a very sad day for commercial democracy. Yes the taxpayer/government owns 82% of RBS. If there had been any concern about the democratic process, then UKFI and Treasury should have filled the board with their people rather than commercial appointments under the chairmanship of Sir Philip Hampton. The fact remains that political expediency and public opinion bullied Mr Hester into waving his justified bonus. There is no doubt that Labour and the Lib Dems would have won that vote. It may not have necessitated RBS to change its mind about Mr Hester’s bonus but it would have made Hester’s position untenable.

“Mr Hester’s job at RBS in the last 3 years has not been made any easier by the incompetence of EU politicians, whose inept and moribund approach to the sovereign debt crisis has trashed the banking sector’s value. This level of incompetence has taken the EU and the UK to the brink of recession. What bank in its right mind would lend money to counterparties, which may not be able to repay.

“We must hope that Stephen Hester does not resign. Frankly he has grounds to! The job is immensely stressful. Does he need the grief if the support is not there? Frankly the office of CEO has been rubbished by the unparalleled pressure heaped on Mr Hester. The £1.2m salary is cast in stone. Mr Hester needs to keep a team of the best people incentivised so that the taxpayer gets its £45bn returned PDQ! Bonuses awarded to Mr Hester are only meaningful if RBS’s share price rises, resulting in the taxpayer being repaid. That strikes me as sensible.

Ralph Silva, a strategist at Silva Research Network, has been active on Twitter this morning. “Stephen Hester, class act, finally playing the PR game. Lets hope he sticks around.

“It is becoming clear that RBS and Lloyds have to be privatized or they will die. Good people are leaving for the prospect of better pay.

He added: “Banks need to be careful, the media is out for blood this bonus season, and are backed by politicians”

Mark Field, the Conservative MP for the City of London and Westminster, said Hester had been “vilified” and warned that the intense row would put the best candidates off running the majority state-owned bank in the future. “I want to make sure we’ve got the brightest and best people on board to protect our bank,” he told the BBC Today programme. “Who is going to want to take that job going forward.” © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds