Shareholders Say Hester Is 'Underpaid’

Royal Bank of Scotland’s largest shareholders have lent their support to the bank’s chief executive, saying he is not being paid enough for his work.

Giving evidence to a parliamentary committee, Richard Buxton, head of UK equities at Schroders – the largest owner of RBS shares, after the government and the bank’s employees – said Stephen Hester’s pay had become a “political football”.

“He can’t at present be paid a commercial rate for doing that job,” Buxton said.

He was supported by Robert Talbut, chief investment officer of Royal London Asset Management, who said: “Its [RBS’s] ability to retain a commercial management team is going to be severely inhibited if they do not believe they are going to receive a significant market rate.”

Earlier this year, Hester waived his annual bonus of £963,000 following a political storm; and, last week, commented that he believed the pressure put on him over his bonus was “unfair”, and he had been “within inches of quitting”.

In response to the shareholders comments, former Liberal Democrat Treasury spokesman, Lord Oakeshott, said it was a case of “the trail trying to wag the dog”.

“We own 82% of it [RBS] and we didn’t put the money in as a share price punt, we did it to get the bank lending again,” he said.