Royal Bank of Scotland is now fair game as a "political football" in the UK, which is likely to scare away top executives and hurt the share price, the Wall Street Journal writes.
The British government has forced RBS chief executive officer Stephen Hester to give up a $1.57 million bonus, following a long-standing debate in the UK about bank bonuses. Hester’s sacrifice “takes the row to a new level,” the Journal notes.
“The treatment of Mr. Hester… confirms that RBS is now a political football,” according to the newspaper. “Any impression that the government is now calling the shots is sure to make it harder to retain and recruit high-quality staff. To the extent that hits performance, it will also hit the value of the bank.”
The story comes on the same day as news that former RBS CEO Fred Goodwin, widely blamed for the bank’s spectacular demise, has been stripped of his knighthood.
“Criticism of what are seen as 'fat cat' bankers has become a popular political sport in Britain, as ordinary citizens struggle with a weak economy and widespread layoffs,” writes the Journal.
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