It is hard not to feel a tinge of sympathy for the Royal Bank of Scotland’s chief executive Stephen Hester. Today, he endured a grilling from MPs over proposed bonuses — about a billion pounds in total — that RBS will be handing out. His point is that the bank has no alternative, if it wants to remain competitive by retaining top staff.
He insisted before the Treasury Select Committee in the House of Commons that his policy was to pay “the minimum we can get away with in the market place,” adding: “Shareholders have raised concerns about our ability to keep and motivate good people.”
He may have a point, but citing shareholders was a tad undiplomatic when RBS is now 84 percent owned by British taxpayers, and the new owners seem more concerned about bonuses being paid out at all than whether RBS can keep “good staff.”
At least Hester appears to understand that persuading the public otherwise is going to be a huge challenge — some would say impossible. Asked by one MP about what plans he had to persuade the public of the need for the forthcoming bonuses, Hester said with a rueful smile that he had been thinking of going on holiday, although even if he did he wouldn’t be able to escape the fallout.
So can we take it that RBS like other banks still has not fathomed out a communication strategy to cope with the public’s disdain?