The chairman of Royal Bank of Scotland says he underestimated the public outcry to the bonus awarded to the bank's chief executive. Earlier this week Stephen Hester gave up the award worth just under £1m in shares following pressure from politicians, the public and sections of the media.
Sir Philip Hampton told Today presenter Evan Davis that the RBS had not predicted the level of scrutiny the bonus would attract.
"I think it's true that we underestimated the scale of the public reaction to the bonus award. I think probably in hindsight having Stephen Hester as the focal point of public concern about these things, being the first as it were to be scrutinised in this way was wrong.
"We did that essentially because there was so much speculation about it. We thought the speculation was itself damaging and therefore decided to end the speculation by making it plain but we certainly underestimated the scale of the reaction."
Sir Philip said that Mr Hester had one of the toughest jobs in banking. But he added that, although his pay was high, it was not at the same level of some other bankers and businessmen.
"Stephen Hester has one of the most challenging and demanding jobs, I think, literally in world business and this is a huge bank, absolutely vital to the British economy, systemically important to the world's financial system. It got into a terrible mess," he explained.
"Stephen Hester and his team were brought in to sort that mess out. Although their pay is very high in absolute terms, in relative terms to bankers and indeed to top businessmen generally, it's not particularly high by most measures in fact it's quite low so whilst I understand this concern I also know we've got to live in a competitive market place and if we don't get this enormous financial institution run by the best people then we won't be doing the right job for the British taxpayer."
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