RBS chief warns that caps on bonuses have impeded recruitment and retention

BONUSES

RBS chief warns that caps on bonuses have impeded recruitment and retention

Stephen Hester, chief executive of Royal Bank of Scotland, has admitted that the ability of the bank’s investment banking unit, GBM, to hire high-quality staff was being hampered by government restrictions on pay and bonuses, The Times newspaper reports.

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He said: “It has been a significant impediment this year and I expect it will be next year. I’m not complaining about that, I understand it completely - we ‘get it’. We have no problem leading the world on the subject of bonuses, but it is a tightrope, and we have to balance reform with having good people who can get the tax payer value for money.”

The Times report adds: “Hester insisted that no decision had been taken on whether RBS would try to side-step the effective ban on cash bonuses with higher base salaries, but he wanted to ensure that people are not rewarded for excessive risk-taking.”

Want to know more?

Title: “We aim to put the taxpayer in profit, says Hester”, by Ian King, The Times, 7 November 2009.

Availability: To read the article online visit The Times web site: click here.