Even My Parents Think I'm Overpaid, Admits RBS Chief Executive
THE GUARDIAN: But Stephen Hester tells MPs that although his bonus package could be worth up to £10m, it is currently worthless as shares in the state-controlled bank have failed to rise

Stephen Hester giving evidence to the Treasury select committee today. Photo: The Guardian
Stephen Hester, chief executive of Royal Bank of Scotland, admitted today that his parents believe he is paid too much as he stressed that his bonus package was currently worthless because the bank's shares had failed to rise.

Asked by the Treasury select committee of MPs whether he understood why the government wants to restrict bonuses at the state-controlled bank, Hester replied: "Yes".

He insisted that the bank did not yet know the size of the bonus pot that would be split between its 22,000 investment bankers. Hester also revealed that a "handful" of highly paid bankers would avoid the restriction placed on the bank not to pay cash bonuses to anyone earning more than £39,000 because of legal commitments made to them.

He told the MPs, who are also taking evidence from his counterparts at Lloyds Banking Group and Northern Rock, that his "biggest single business problem" was recruiting people who were concerned about the criticism they might encounter if they work for RBS.

Institutional investors had "raised concerns about our ability to keep and motivate good people".

The bank would not tell staff whether they will get a bonus and how large it would be until the end of February, he said.

The Treasury has a power to veto bonuses at the bank under the terms of insuring £282bn of troubled loans through the asset protection scheme (APS). Hester insisted no board directors have threatened to resign as a result of this restriction and insisted he wanted to pay "the minimum possible while keeping staff engaged".

Of his own pay deal, which is linked to the RBS share price but could be worth almost £10m over three years, Hester said: "If you ask my mother and father about my pay they'd say it was too high as well, so some people close to me have that view of bankers." >>> Jill Treanor | Tuesday, January 12, 2010

THE GUARDIAN – BUSINESS BLOG: Bank pay row reaches a crescendo: Banks are preparing to snub the politicians and begin a bumper bonus round later this week. First they have to brave a few final assaults: Obama's threatened tax in America and the House of Commons Treasury committee >>> Dan Roberts | Tuesday, January 12, 2010

Al Yamamah: BAE Bosses Detained by US Authorities
Photo of Mike Turner, chief executive of BAE Systems, courtesy of The Sunday Telegraph
THE SUNDAY TELEGRAPH: Two senior executives at Britain's biggest defence company were detained last week by American authorities investigating corruption allegations, the Telegraph has learnt.

Mike Turner, the chief executive of BAE Systems, was held with a senior colleague as they landed in America. Personal electronic equipment, including laptops and BlackBerries, was seized and examined before the pair were released.

The detentions are part of an investigation by the US Department of Justice into allegations surrounding the £43 billion al-Yamamah arms deal with Saudi Arabia. BAE has been accused of making tens of millions of pounds in illegal payments to Saudi officials, although the company maintains it has always acted lawfully.

In December 2006 the Government announced that the Serious Fraud Office was dropping its investigation into the al-Yamamah deal, prompting political controversy. America is continuing its inquiries.

The detention of the BAE executives, understood to have been at the George Bush Intercontinental Airport in Houston, Texas, has raised serious concerns at high levels of the Government about "heavy-handed" treatment.

The detentions follow the case of the "NatWest Three", British businessmen each sentenced to 37 months in prison in America this year, and threatens to harm US-UK relations in the run-up to the Group of Eight summit of leading industrial nations in Japan in July.

About the same time as Mr Turner and his unnamed colleague were being detained last week, a number of US-based BAE executives had their homes raided by authorities, The Telegraph understands. BAE Systems Inc, a subsidiary of British-based parent BAE Systems plc, has 43,000 employees in America.

A Foreign Office official expressed concern last night about the way Mr Turner and his colleague, who were on their way to a business meeting, had been treated. He said: "It was pretty heavy-handed. They had their laptops taken away and their documents photocopied."

British officials in Washington were informed of the incident on Monday when Mr Turner, a 59-year-old father of four, alerted military contacts at the embassy. He is also understood to have called contacts in the American government.

The Foreign Office official said it was clear that the American authorities were expecting the men's arrival. "They knew they were coming and they prepared the whole thing," he said. Mr Turner, who was back home in Britain this weekend, is expected to return to the US shortly in ­connection with the corruption investigation. BAE Bosses Detained by US Investigators over Saudi Case >>> By Patrick Hennessy and Tim Shipman | May 18, 2008

THE OBSERVER:
US Detains BAE Bosses over Saudi Contracts >>> By Gaby Hinsliff | May 18, 2008

THE TELEGRAPH:
Second BAE Boss Detained in US >>> By Russell Hotten, Industry Editor | May 19, 2008

The Dawning of a New Dark Age (Paperback - UK)
The Dawning of a New Dark Age (Hardback - UK)

Starbucks Sacks Chief Executive
BBC: Starbucks has sacked its chief executive Jim Donald and handed the reins back to its chairman and former chief executive, Howard Schultz.

The announcement saw shares in the firm jump more than 10% in early Tuesday trading on Wall Street.

The news is part of the coffee giant's plans to lift its fortunes, which also includes closing some US stores and slowing the pace of opening new ones.

Starbucks shares have fallen 50% in the past year as its US sales have slowed.

It will give more details of its plans when it reports results on 30 January. Starbucks sacks chief executive >>>

Mark Alexander (Paperback)
Mark Alexander (Hardback)