RBS Chief Stephen Hester May Not Have Been Briefed On Fellow CEOs Bonuses When He Defended His £7.7M One By Saying It Was "At The Low End Of Comparable Jobs"
RBS CEO Stephen Hester was recently asked by Parliament to defend his bonus for 2011, which clocked in at around £7.7m. Some might argue the Brits had the right to do so in light of the fact that about 82 percent of the bank is owned by the government. The two sides brought slightly different opinions to the table, Hester being of the mind that the his paycheck was well-deserved, and the MP's being in strong disagreement, given that RBS recently reported net losses for a third consecutive year.
Things got quite heated, with Labour MP Austin Mitchell asking, "What have you done for £7.7m? Is it that you produced an outstanding enormous profit for the bank, or is it because you are a greedy banker?" Hester, taking umbrage at the suggestion that a) he didn't earn every pound of his package and that b) he was in anyway greedy sought fit to lay some truth on Mitchell and Co's asses, telling them his number was "at the low end of comparable jobs in the UK and globally." An interesting theory!
Here's what some other bank CEO's earned this year:
Jamie Dimon: £10.9m
Bob Diamond: £10.1m
Lloyd Blankfein: £7.9m
Josef Ackermann: £7.8m
James Gorman: £4.625m
Vikram Pandit: £0.0m
Oswald Grübel: £0.0m
So overall, Hester is actually more toward the middle on comp but if we're comparing him to people with actual 'comparable' jobs (i.e. guys running firms who've only recently begun to emerge from the era of getting their asses handed to them, like Vickles and Grübel and/or were at one time a ward of the state), he's making out pretty well. But you know what? Those are just numbers and whether he's at the top end or the bottom shouldn't actually matter because here's what- no one's got a gun pointed to his/her head that will go off if they don't keep Hester happy. "No one's forced to employ me," he said. The bottom line is RBS's board and shareholders want to pay Hest this much and if they didn't they'd give him the boot. Speaking of which, let's make sure Big Daddy sees a few more zeros next year, okay? This time around.
"It is in the hands of others how they want to pay me for that and it is up to me whether I want to do the job for that."
You've all been warned.
