The chief executive of the Royal Bank of Scotland has defended the practise of paying bonuses to bankers.
Appearing before the Commons Treasury committee this morning, Stephen Hester said that high levels of remuneration could be necessary in order to attract the best staff to the troubled bank.
He said that if he had told potential employees they would "get a more difficult job and get treated worse than your current job" he would not have been able to hire many people.
"The first point of comparison is what that person is already being paid," he said.
But he insisted the bank aimed to keep bonuses as low as possible.
He said: "It is my duty as chief executive to protect shareholders interests and to pay the minimum bonuses we think we can get away with, consistent with keeping staff."
"I needed to keep the best of our people and have them motivated for this difficult job," he added.
"One of the things we have tried to do is be among the leaders of fundamentally reforming some aspects of how our industry has worked."
Hester said RBS had introduced the most "far reaching claw back clause" of anyone in the industry.
And the bank, which is 84 per cent owned by the government, was "massively more restrictive than any other bank on the planet" when it came to bonus payments, he claimed.
RBS is due to announce the bonuses it will pay its employees in the next few months.
Asked by the committee whether he had a plan to justify the payments to an angry public, Hester joked that it may be best to "go on holiday for a long time".
John McFall, the chairman of the committee, also questioned Hester on his own salary.
"It seems the sheer scale of the package is out of synch with what is happening elsewhere," he said.
McFall suggested that the estimated potential £9.7m remuneration due to Hester made him the highest paid public servant.
"Don’t you see that as a legitimate concern for people?" he asked.
Hester said that when offered the job a year ago he had said he would be "content" with whatever the "going rate" for doing similar jobs else where was.
"When I was asked to do this job, the only conversation I ever had about my pay was when I was asked what it would take to attract me to leave my previous job," he said.
And he insisted that as his pay packet, which was linked to the recovery of the bank, was currently worth nothing as the bank’s share price had not risen.
But he did admit that even his parents had suggested his six figure salary was "too high".
