The controversy over Royal Bank Of Scotland Chief’s £963K bonus hit the headlines this week.
As you might have seen there has been a range of reactions broadly along a spectrum from ‘he deserves it’ (the bank, and UK Financial Investments) to ‘he doesn’t deserve it’ (politicians and outraged members of the public). Clearly the debate hinges on what people consider to the value of Stephen Hester’s contribution to the business.
People can get very ‘green eyed’ over the rewards other people achieve, and in my commercial past I enjoyed business performance bonuses. So as a general principal I don’t have a problem with people who make a positive difference to an organisation and who face risks and responsibilities getting additional rewards.
Stephen Hester’s bonus get’s me wondering though. Wondering especially about what innovative and insightful difference he has made to RBS. The sort of difference that would leave ordinary people like you and I slapping our foreheads and saying ‘you know, I wish I’d thought of that!’
From the outside it seems he is clearly a ‘safe pair of hands’ and this reputation has obviously been well earned. My question is this…is being just a safe pair of hands enough to justify a massive bonus?
Tell me if I’m wrong, but being fortunate to have the senior job post and then overseeing some rather obvious tasks that most final year undergraduate business students would identify as necessary in the context of RBS hardly seems worth £963k. A bonus yes, but £963k for re-balancing a business that needed re-balancing, and the obvious move of cutting costs? Where are the bright ideas? the new value propositions? the game changing ways of working?
There is the argument that the bonus is relative in the context of the vast sums of the banking world and the competition for talent in a global market place.
Stephen Hester a Lionel Messi? I can’t really say. Mind you if the remit was ‘to get it sorted’ and he has done that then he probably deserves the bonus because there was always the possibility he might not have! It’s just that it seems for alot of people there was a very low probability of Stephen screwing anything up because it was so bad in the first place.
We are told “the bonus reflected Mr Hester’s work towards rebuilding RBS”. What do you think?