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Simon English: Let's deny Hester's bonus as a test

Simon English
Thursday 19 January 2012 20:00 EST
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Outlook: Is Stephen Hester deserving of a bonus? In some ways you can see he is. No one doubts that the Royal Bank of Scotland (RBS) chief executive has a mighty task ahead of him.

And no one particularly doubts he's the right man for the job. To hear him talk is to be reassured; he's a very clever fellow, no question.

The thing is, if we're trying to move to a place where bonuses come only after good results are achieved rather than in expectation of future returns, giving him anything on top of his salary sends all the wrong signals.

Any fool who took a punt on the shares lately (erm, yes, guilty) is suffering. Why must Mr Hester get prizes? Since we own it, RBS can be the testing ground for whether lower banker pay really impacts on performance or not. It'd be a bit inconvenient were Mr Hester to quit, but at least we'd get to see whether the next man – a cheaper operator presumably – is actually any worse than the supposed star.

When Mr Hester signed up for this gig, he knew it was going to be politically sensitive. And he surely understood that it was partly an act of public service.

The Prime Minister should ask him to waive his bonus. Let's appeal to his better nature, if only to see whether he has one.

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