Stephen Hester wasn't responsible for the apocalypse that is Royal Bank of Scotland (LON:RBS), but he was highly remunerated and given £45 billion of taxpayers’ money to improve matters. He didn't stay around long enough to see the fruits of his labours; shareholders have had the benefit of that today.
In the limited pool of talent of the calibre of Mr Hester he has now emerged as the shareholders' champion at RSA (LON:RSA).
Ireland and the weather get the blame for the financial disaster of 2013. The weather is always with us and some years it will be bad for insurers; it will get the blame for failure but never the credit for success.
It is now well known that RSA was growing market share rapidly in Ireland. Did nobody on the Board question how this was being achieved (low-ball premiums?) and at what potential risk? All were happy to see the rising premium income and award and take the resulting bonuses.
No Mr Hester the RSA problems are not down to "Ireland" or the weather: incompetent, overpaid management pure and simple.
RSA should do the right thing by its shareholders and put itself up for sale; then we should see a bit more than a £1 share.
Disclosure: Once a large shareholder in RBS and RSA: now a bit smaller!
"It is now well known that RSA was growing market share rapidly in Ireland. Did nobody on the Board question how this was being achieved (low-ball premiums?) and at what potential risk? All were happy to see the rising premium income and award and take the resulting bonuses."
The crisis of 2008 and beyond showed how incompetent management were when it came to their understanding and perception of risk. Many of these big players, RBS, HBOS, etc, either didn't get it or turned a blind eye. Many of them didn't even understand the risk but seemed to assume that the clever people that they had employed did. The trouble is ignorance of risk seems to be at its greatest when times are good and when the perception is that the good times will go on forever. Also, one cannot overlook the simple fact that those at the top where generously rewarded with the pay and bonus packages that to do anything that would effect their own bottom line was unlikely. Ignorance is bliss.
However, we are 6 years on from the crisis that supposedly no one could see coming, yet it is clear with many companies lessons still haven't been learned.
