The battle of Stephen Hester’s bonus is a PR disaster for all the parties

Well maybe not Labour leader Ed Miliband although it’s surprising that no-one has reminded him yet that RBS boss Stephen Hester’s generous deal at the nearly-nationalised bank was struck by former Labour PM Gordon Brown and chancellor Alistair Darling.

And that it was Labour that decided that some public sector ‘workers’, like GPs and hospital consultants, should be bunged loads of extra money for doing less work.

Hester today agreed to forego his £963,000 share bonus (down from the £2.5m or so the board wanted to give him) after an undignified farrago involving coalition PM David Cameron (who can’t resist sticking his oar in) at complete cross-purposes with chancellor George Osborne (who clearly thinks there’s nothing wrong with people being rich, like him).

It’s hard to feel too sorry for Hester, who’s clearly not short of a few millions and is always pictured in his hunting pinks. Why is it, by the way, that girls look good in their hunting gear while blokes look smugly ridiculous? But Hester has been booted around like a football and the facts are that he’s done a pretty good job at bankrupt RBS, nixing investment bankers (however reluctantly) and flogging off great big businesses for pretty good prices.

The Hester affair is all part of the perennial battle of bankers’ bonuses of course but the remedy for this is not hard to find. Shareholders can object (they’ve always been able to, even before business secretary Vince Cable’s mooted reforms) and the Government can tax them to oblivion, something it seems strangely reluctant to do.

This has been yet another case of government (sort of) by tabloid headline. What the current government should do is renegotiate Hester’s contract and any others that fall into the same ‘fat cats’ category. It’s hardly been reluctant to do this with a whole range of suppliers and more than keen to renegotiate those of ordinary public sector workers, usually by terminating them.

As for the hapless Hester, you wonder why he puts up with it. Is he in search of a knighthood? At least they’re free.

You May Also Like

About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.