By Chris Vellacott
LONDON Feb 4 British insurer RSA has
appointed former Royal Bank of Scotland boss Stephen
Hester as its new chief executive with immediate effect,
replacing Simon Lee who quit in December.
Hester, ousted from state-backed RBS last June by Britain's
finance ministry, will take on an insurer that is reeling from
an accounting scandal at its Irish business that left it with a
200 million pound ($325.89 million) hole in its finances.
The former investment banker has been praised by the
government and investors for salvaging RBS by slashing risky
assets and costs, but he has also become a lightning rod for
criticism of bankers' hefty bonuses.
A spokesman at RSA said his pay for 2014 will amount to
1.255 million pounds, including a basic salary of 950,000
pounds, 285,000 pounds paid towards his pension and a 20,000
pound car allowance.
In addition, he is entitled to take part in a long-term
incentive scheme worth up to 300 percent of salary but deferred
until 2017. In 2015 he will be eligible for a bonus of up to 80
percent of his basic salary.
RSA's Chairman Martin Scicluna, who has run the company
since Lee departed, will return to his usual role, the insurer
said in a statement.
The company's Irish issues surfaced alongside hefty bills
from extreme weather in Europe and Canada, prompting Scicluna to
initiate a review that could lead to the sale of part of the
RSA has said it will publish conclusions from the review
when it releases its annual results on February 27.
"The challenges of recent months have demonstrated that we
have not lived up to our stakeholders' expectations and
performed to our true potential," Hester said on Tuesday.
Hester was drafted into RBS following its 45 billion pound
government rescue during the 2008 financial crisis. He oversaw a
mammoth restructuring, shedding some 900 billion pounds of
non-core assets, but the bank came under pressure from lawmakers
to further slim its investment activities.
Hester resisted the demands, saying the investment bank
provided crucial services to RBS's corporate clients, and the
resulting friction led to his eventual departure.