Scotland bank boss defends bonus after big fine
"I think that my bonus should be assessed on all of the things I do well and badly and judgment should be reached," Mr Hester told British MPs on the Parliamentary Commission on Banking Standards.
"It's not me who makes a judgment," he said, when questioned whether he would turn down his bonus for last year.
British taxpayers own 81 per cent of RBS after it was bailed out at the height of the global financial crisis in 2008 with £45.5 billion of taxpayers' cash.
"I think that if you look at the RBS that we took on four years ago or so, we have done huge things to rescue a situation for the company and for society and for its shareholders, which included hundreds of billions of pounds of risk that the country was exposed to which it is not exposed to any more," Mr Hester said.
He said he had managed to get the taxpayers "off the hook" for huge liabilities over the past four years.
RBS said last week that it would pay £391 million to British and US regulators, becoming the third bank to admit its part in the Libor affair after Barclays and UBS. The Edinburgh-based lender has already said it would recoup about £300 million from its staff bonus pool and by clawing back previous pay awards.
RBS chairman Philip Hampton said on Monday that Mr Hester's pay was "modest" compared with his peers. "Stephen is doing one of the most difficult, demanding jobs in world business because RBS was the biggest banking failure in the world, and Stephen took it on at an exceptionally difficult time," he told lawmakers. There is, meanwhile, considerable pressure for senior bank executives to take responsibility for the Libor crisis.
As a result, RBS announced last week that John Hourican, chief executive of its markets and international banking division, was to leave the group and forfeit his 2012 bonus and long-term incentive shares.
"There had to be a serious captain-on-the-bridge departure," Mr Hampton said.
Frequently Asked Questions about this Article…
The article says Royal Bank of Scotland was fined over Libor rate rigging. It reports a US$612 million fine and also notes RBS said it would pay about £391 million to British and US regulators as part of the Libor settlement.
Stephen Hester told MPs his bonus should be judged on everything he has done well and badly, and that the decision is not his to make. He also argued he helped rescue the bank, reducing risks and getting taxpayers 'off the hook' for large liabilities over the past four years.
According to the article, British taxpayers own 81% of RBS after the 2008 bailout, which involved £45.5 billion of taxpayers' cash.
RBS said it would recoup about £300 million from its staff bonus pool and claw back previous pay awards. The bank has already announced some pay forfeitures by staff connected to the scandal.
Yes. The article says John Hourican, chief executive of RBS's markets and international banking division, was to leave the group and forfeit his 2012 bonus and long-term incentive shares. There is also wider pressure for senior executives to take responsibility.
Philip Hampton described Hester's pay as modest compared with his peers and said Hester took on an exceptionally difficult job rebuilding RBS after one of the biggest banking failures in the world.
The article says Barclays and UBS were earlier banks to admit involvement in the Libor affair, making RBS the third to acknowledge its part.
The article outlines that RBS faces regulator payments (about £391 million) and is recouping roughly £300 million from staff bonuses and clawbacks. Those amounts will impact the bank's costs and earnings, while the bank's leadership says they have reduced wider taxpayer exposure from the earlier crisis.
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