All chief executives had to come to terms with professional mortality, Stephen Hester said last year. "Chief executive jobs bring with them job insecurity … I've always accepted that part of it is that I will not exit in a way and timing of my choice," Hester said.
Last week, the boss of Royal Bank of Scotland found out what it is like to be ejected from a top job before being ready to bow out, albeit with a payout that could ultimately reach £5.6m.
The announcement by RBS at 5.15pm on Wednesday about the departure of the 52-year-old Yorkshireman from arguably the highest-profile role in banking stunned the City. It sparked a wave of political recriminations about the hand of the government in forcing him out to clear the way for privatisation of the 81% taxpayer-owned bank before the general election in 2015.
Sir Philip Hampton, the RBS chairman, whose own tenure at the bailed-out bank is also being called into question, admits that Hester would still be in the top job if the plans for privatisation were not on the table. "If the privatisation wasn't there, we'd be rolling on, probably looking for Stephen to have a successor (later) in 2014," Hampton told the Observer.
Hampton, who insists that he has "no imminent plans" to quit until Hester's replacement has "their feet under the table" said Hester's departure had been accelerated at the request of UK Financial Investments, the body that looks after the stakes in the bailed-out banks.By the time of the bank's annual meeting in 2015, Hampton will have served six years, so this is seen by some as a moment to bow out.
Hester, who was admired by Osborne when the chancellor was in opposition, had not won as many friends in the coalition as he might. Aside from the rows over his bonus payments, he did not shrink the investment bank as far or as fast as the new coalition government wanted. Neither, in the eyes of coalition politicians, did he make lending to small business a high enough priority.
Hester might argue that the goalposts were moving constantly while he was trying to stop the bank going bust – a rescue job that turned out to be far harder than he had thought it was going to be.
During the meeting with Robin Budenberg, the chairman of UKFI, Hampton was told that the body had been "sharpening" its views on the future of RBS and wanted it to be ready for possible privatisation by the end of 2014. A chief executive was needed who would see through the sell-off and then stay on for another five years or so.
"That would mean that Stephen would potentially do nine or 10 years, which is an incredibly long time," says Hampton. And a prospectus for a share sale requires a chief executive to be "enduring", he adds.
From the moment his departure was announced, Hester made it clear that it was not his idea to quit. It was "a board decision," he told reporters on a hastily convened conference call 30 minutes after the announcement. "I'm cooperating amicably," he said. Hester had known since the end of May that he was heading for the exit.
He and Hampton had discussed on many occasions which one of them would leave first – they had arrived within months of each other after 2008 bailout and chief executives and chairman rarely bow out the same time. They had never resolved which one would go first, but with privatisation on the agenda next year, succession planning – usually discussed in June – was becoming more crucial.
Hester, whom the board had assumed would step down after completing his five-year restructuring plan next year, had begun to test publicly the appetite for him to stay on.
Accustomed to being asked how long he intended to stay – particularly after he admitted having nearly walked out in anger in January 2012 during the row over his bonus – at the start of May he was still handing out his stock answer. "I took on a mission with this bank; that mission is shared with colleagues and we want to return this bank to doing the job for the whole nation that it can do, in cleaned-up form, supporting customers and with a profitable and successful future."
But just a few days later, his language about staying on to see through a sell-off had hardened: "If I'm wanted [to lead the privatisation], why wouldn't I want to do that?" he said.
By mid-May, speaking outside the bank's annual general meeting in Edinburgh, he was even firmer: "If people think I can contribute, I'd like to see this company and this mission through to privatisation."
Others, however, had other ideas. A fortnight ago, Hampton called a private meeting with George Osborne.
The RBS chairman makes it clear that there was no disagreement between the bank and the government – in other words, he also thought it was time for Hester to go. The bank's board and the government had always been keen to get the bank out of state ownership as soon as possible.
At the same time, some board members are said to have been forming the view that Hester, an accomplished investment banker who had been parachuted in to run RBS when it was on the brink of collapse, might find running a "normal" bank rather less exhilarating than the huge rescue job of the past five years.
Hampton felt that finding a replacement for Hester could not be done in secret – or behind the back of the chief executive.
With the search for Hester's successor by headhunter Anna Mann under way, the City is awaiting details from the chancellor about how he intends to steer the sell-off and is concerned about whether an appointment can be made by the end of the year.
Some shareholders are anxious that Hester was forced out by Osborne and that there is too much political interference in the bank. Hence the £1bn wiped off RBS's stock market value on Thursday.
"The message is that no matter what is said we are at the whim of the largest shareholder and that clearly implies a significant discount," one said. But mixed messages are coming out of the government. Last month, Prime Minister David Cameron appeared to be clearing the way for a big public sell-off of RBS; last week, however, he appeared to be softening expectations, talking about the public being more concerned about a bank that can contribute to the recovery of the economy.
Treasury minister Sajid Javid told MPs that there was no timetable, no sell-off price and the 2015 general election was not regarded as a key date. Meanwhile, Nick Clegg, the Liberal Democrat leader, waded into the debate about the shape of RBS, saying it could not be "huge, big, hulking, what they call universal bank".
The parliamentary commission on banking standards, expected to report this week, could also call for a debate about splitting RBS into a good and bad bank. This could delay any attempt at privatisation, the Policy Exchange thinktank warned last week. Ulster Bank is the major problem that has yet to be fixed and an obvious candidate for bad bank treatment.
Hampton concedes that the debate about the structure of RBS is still raging because the bank has stayed in government ownership longer than the three or so years that had been expected, partly because of the eurozone crisis. "Because things have taken longer, these things get more debated in political circles," said Hampton.
That debate is likely to become even more heated this week when Osborne sets out his plans for banking reform in Wednesday's Mansion House speech. No doubt Hester will be listening closely to ensure his resignation was not in vain.
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