You try defending your salary, Stephen Hester tells Naughtie

Feb 8, 2012
Nigel Horne

RBS boss admits he considered resigning over bonus uproar – but he refuses to apologise for his high pay

RBS chief executive Stephen Hester briefly considered quitting his job during the recent uproar in Parliament and the media about his £963,000 shares bonus - but felt it would be too “indulgent” to do so and resolved to stay in the hot seat.

Speaking publicly for the first time about the anger over his bonus, he told Radio 4 Today listeners: “I am not a robot.” Pressed as to whether that meant he had considered resigning, he confirmed that he had.

However, he still believed he deserved the bonus - which was to have come on top of his £1.2m salary - because of the huge challenge of rescuing the bank. He decided to waive it for the sake of RBS, which he felt would be damaged by the “intensity” of the spotlight.

Hester made it clear that he found it hard work turning round the Royal Bank of Scotland which he took over from Fred Goodwin in 2008 when the government poured in £45bn of taxpayers’ money to rescue the bank.

He had had to replace the entire senior management team at RBS, going round the world to find the best personnel, he said. "Not just people to run the bank well, but to defuse the biggest time bomb in history in terms of bank balance sheets."

Intriguingly, he described the £45bn as having been “lost”. According to the BBC’s business editor, Robert Peston: "What that implies is that the ultimate cost of clearing up the mess will exceed £45bn."

On the subject of bankers’ pay, Hester agreed that with the benefit of hindsight there had been both "over-confidence" and "over-rewards" within the banking industry, however he refused to apologise for his high pay.

"Of course these issues of what different people get paid are as old as the hills,” he said. “I don't have the luxury of that debate. I'm not a politician. What I want to be is a commercial animal."

He added: "I think we make a mistake as a society if we forget how wealth is generated and how successful people are motivated and in the case of RBS it's more complicated... we're defusing, delicately, a big time bomb.”

Pressed on whether bankers’ salaries were fair in a time of austerity, he resorted to the increasingly popular tactic of suggesting that his BBC interrogator - in this case James Naughtie - might not want to have to defend his salary to other workers.

Oddly, he chose “nurses” as an example - quite why remains a puzzle.

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