This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/8453920.stm
The article has changed 7 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| RBS chief defends pay structure | RBS chief defends pay structure |
| (about 1 hour later) | |
| The chief executive of Royal Bank of Scotland (RBS) has defended his bank's pay structure to a committee of MPs. | The chief executive of Royal Bank of Scotland (RBS) has defended his bank's pay structure to a committee of MPs. |
| Stephen Hester faced several questions from the Treasury Committee on expected bonuses and on his own pay package, worth a potential £9.6m. | Stephen Hester faced several questions from the Treasury Committee on expected bonuses and on his own pay package, worth a potential £9.6m. |
| He said that he was offered the "going rate" for his job but added that even his parents think he earns too much. | He said that he was offered the "going rate" for his job but added that even his parents think he earns too much. |
| He said in some way RBS, which is 84%-owned by the taxpayer, had "led the way" on pay reform. | He said in some way RBS, which is 84%-owned by the taxpayer, had "led the way" on pay reform. |
| Mr Hester said that RBS had historically paid bonuses in cash but the bank had now changed to paying large parts of bonuses in shares. | Mr Hester said that RBS had historically paid bonuses in cash but the bank had now changed to paying large parts of bonuses in shares. |
| He was one of three bank bosses being questioned by the committee. The other two were Eric Daniels from Lloyds and Gary Hoffman from Northern Rock. | |
| Bank 'on track' | Bank 'on track' |
| Mr Hester added that his own pay package was worth next to nothing as the share price of RBS was so low, currently 34.7 pence. | Mr Hester added that his own pay package was worth next to nothing as the share price of RBS was so low, currently 34.7 pence. |
| Live coverage of select committees - from BBC Democracy Live | |
| Shares in the bank have fallen for the past three years. They declined 41% last year and 87% in 2008. | Shares in the bank have fallen for the past three years. They declined 41% last year and 87% in 2008. |
| He holds shares worth up to £3.4m but is only allowed to sell them in 2014, should the bank's share price rise above 70p. | He holds shares worth up to £3.4m but is only allowed to sell them in 2014, should the bank's share price rise above 70p. |
| He also denied that any members of the board had threatened to resign if the government stopped them paying bonuses of £1.5bn to staff in its investment arm. | He also denied that any members of the board had threatened to resign if the government stopped them paying bonuses of £1.5bn to staff in its investment arm. |
| But he admitted that he wants the core investment banking business to be more profitable than it is. | But he admitted that he wants the core investment banking business to be more profitable than it is. |
| Mr Hester added that the bank was "on track" to meet its ambitious targets in terms of returning to private ownership. He had told the committee last year that he hoped to turn the bank around in three to five years. | Mr Hester added that the bank was "on track" to meet its ambitious targets in terms of returning to private ownership. He had told the committee last year that he hoped to turn the bank around in three to five years. |
| GARY HOFFMAN Chief executive, Northern Rock, 49Basic salary: £700,000 Joined Northern Rock in August 2008 from Barclays | |
| On the government's asset protection scheme, which provides taxpayer guarantees against potential losses on bank assets, he said that it was unlikely that RBS would call upon it. | On the government's asset protection scheme, which provides taxpayer guarantees against potential losses on bank assets, he said that it was unlikely that RBS would call upon it. |
| "The world looks a bit less gloomy today than it did in February when the asset protection scheme was conceived and also RBS's far-reaching restructuring has begun to pay off as well," he said. | "The world looks a bit less gloomy today than it did in February when the asset protection scheme was conceived and also RBS's far-reaching restructuring has begun to pay off as well," he said. |
| Rock bonuses? | |
| Northern Rock chief executive Gary Hoffman said that his bank may pay bonuses for 2009, after the nationalised bank did not pay any in 2008. | |
| "We have agreed with the board and with shareholders that there would be some incentive scheme for 2009 and if we meet targets that will be paid out," Mr Hoffman told the committee. | |
| But he stressed that the majority of the bank's 4,500 staff were employed in the North East, earned about £20,000 and were not City bankers. | |
| He said there was also an incentive scheme for senior staff, but added that it was not clear yet at what levels that might pay out. | |
| He added that there was a possibility that some people would receive bonuses of £25,000 - the level at which banks must pay a 50% tax. |