Bankers under fire

In recent years it has become more interesting as bankers have sunk to the bottom of the pile in terms of public estimation. No more unseemly has been the row over Stephen Hester’s bonus. Paid in shares, there was clearly an incentive for him to stay on, and get the job of sorting out RBS done.

But with a salary of £1m already, at a time when the bank announced job cuts, and with layoffs across the public sector, it seemed entirely inappropriate that a largely state-owned bank should be making such a substantial payment.

The problem for the government was, according to Mr Hester’s allies, that the banker was urged by Gordon Brown to take the role, and that he was assured the bank would be run along private sector lines.

But it is also important to bear in mind that he would have achieved significant glory if he could walk away from the bank, with his reputation enhanced, and labelled as the man who sorted out RBS.

Indeed, he could probably already walk into another job where there would be no qualms about the size of the bonus, and it was only the actions of Labour leader Ed Miliband, himself under political pressure, that forced the issue.

The problem is that any job, leading a bank that should be bailed out by the taxpayer attracts political risk, and it would be highly unusual for Mr Hester not to have taken this into account. Whether he likes it or not, he is more than just another banker, anonymous to the general public that do not read the financial pages.

He has become a symbol, despite his lack of involvement in the original disaster that happened at RBS, of greedy bankers. He may be sorting out the bank for the nation, and he may eventually be hailed a hero. But that comes at a price, and he was right to take the steam out of the situation and give back his bonus.