RBS , Stephen Hester, Bonus & Prospects

Last week’s Money Week contained an interesting take on Stephen Hester (CEO of RBS), his bonus and the  prospects for RBS. The whole article (by Matthew Lynn) makes a great deal of sense  as the following extract indicates:
The only realistic option (for RBS) is a radical break up. The investment banking business should be stripped out and each unit sold for whatever anyone is willing to pay. Any units that can’t be sold should be handed over for nothing to the staff: let them sink or swim as partnerships.
After that, split up NatWest and RBS into two separate retail banking chains, and sell both – and if they won’t sell, float them as independent companies. The British banking industry could use more competition, having two brands under the same corporate roof doesn’t make sense. Taxpayers will probably never get their £45bn back. But something could be salvaged from the mess.
A million pounds would be cheap for a CEO with a strategy that could sort out RBS. But for one whose strategy looks less and less convincing by the week, it would have been a criminal waste of money.
The route to this opinion can be found on http://www.moneyweek.com/news-and-charts/economics/uk/bonus-bargain-for-a-star-ceo-at-rbs-stephen-hester-57418
Some years ago I was attempting a M.A. in Business and my thesis was focussed on corporate governance. My first chapter drew on the contradiction between the cost of bankers (considered to be too high) and the cost of footballers (all-in-all considered to be value for money as the market corrects itself very quickly and everyone can understand the numbers of goals scored, games won and so on). Based on the above and on what we have seen so far, Stephen Heston needs to be a goal scorer or else given the opportunity to seek new pastures elsewhere.

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