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Sunday 04th of July 2010
April 30, 2010    

RBS chief admits bankers paid too much

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by Kay Murchie

Chairman of the Royal Bank of Scotland (RBS), Sir Philip Hampton, has admitted that bankers’ pay is too high.

However, while conceding that bankers’ pay is “astonishingly high”, he said it is difficult to defend the gap between what most people earned and what some bank staff were paid.

Speaking to BBC Radio 4, Sir Philip said: “If we don’t pay our top people they leave very quickly.

“Our top people are very much in demand and we have seen a significant loss of our top people,” he added.

At its AGM earlier this week, RBS, which is 84% owned by the taxpayer, bowed to shareholder pressure over its bonus scheme for Stephen Hester, stating it would toughen performance targets.

At the meeting, Sir Philip said the board would amend the scheme, which set a target share price for Mr Hester, the bank’s chief executive.

A quarter of the total payout, which could see Mr Hester receive up to £4.8 million - is linked to the RBS share price, which has risen sharply in recent weeks.

However, salaries and bank bonuses have sparked public anger – not just at RBS but also other banks – and have been the subject of heavy criticism since many believe their risks led to the recession.

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