So, Stephen Hester isn’t going to get his 3.6 million shares in RBS after all. After a weekend of furious complaints being broadcast all over the airwaves and the potential indignity of having his own individual pay package debated in the Houses of Parliament, the RBS chief executive has decided to waive his bonus.
Now, it’s rather hard to feel sorry for someone whose basic salary is over a million pounds a year and whose overall wealth dwarves what any normal person can reasonably dream of. Stephen Hester is going to get by just fine. People that rich can ride out an economic downturn without making the really tough decisions many millions of families are having to make on stretched – and often diminishing –household budgets.
But the criticism of the Hester bonus could yet have a serious knock-on effect, making the issue of a £963,000 share issue look like chicken feed.
Firstly, those expressing horror that Stephen Hester could possibly be remunerated to the tune of around £2m have generally issued a scream rather than positing an argument.
One view seems to be that, given his role as a de facto public servant, he should not be rewarded at the sort of levels common in banks which do not have the state as a shareholder. There are a whole range of implications here. When I had the audacity to point out last week that Hester’s package was broadly comparable to that of a mediocre Premiership footballer, I was told in no uncertain terms that this was irrelevant as Manchester United, Arsenal and other clubs are not taxpayer-owned. Can we presume, therefore, that there won’t be a public furore over the size of the bonus paid to Barclays’ boss, Bob Diamond? If you own shares in Barclays, you can take a view. But you can’t do so merely as a taxpayer.
Read the rest of the article on the Daily Mail RightMinds site.