The Board of Directors of the Royal Bank of Scotland Group plc (RBS) has announced that Stephen Hester will be stepping down as the Group’s Chief Executive later this year. The Board believes that an orderly succession process will give a new CEO time to prepare the privatisation process and to lead the bank in the years that follow. Stephen was unable to make that open-ended commitment following five years in the job already.
The search for a successor will commence immediately, led by Philip Hampton on behalf of the Board, and will consider both internal and external candidates. Stephen will continue to lead the business until December 2013 to ensure a smooth handover, unless a successor is in post before then.
Stephen was appointed to the Board in October 2008 and to the position of Group Chief Executive in November 2008. Since then he has led the rescue of RBS, its recovery plan and one of the largest and most complex company restructurings ever seen. Nearly five years into the strategic plan, RBS has made huge progress in becoming a strong bank, with balance sheet and funding transformed and the business fundamentally re-shaped. It is now beginning to prepare for possible share sales by the UK Government. Accordingly, both the Board and Stephen agreed this provided a window to begin a transition of leadership.
Stephen Hester, CEO of RBS said: “It has been nearly five years since I joined RBS after the bank was rescued by the Government. In that time we have reduced the bank’s balance sheet by nearly a trillion pounds, repaid hundreds of billions of taxpayer support, and removed the imminent threat that this bank’s size and complexity posed to the UK economy. All the while we supported 30 million customers every day to help them manage their finances. At the point of Stephen’s departure, in line with his contractual arrangements, he will receive payment in lieu of notice of £1.6m representing 12 months pay and benefits. He will not receive a bonus for 2013, which is also in line with contract terms.