4th Feb 2014 17:45
LONDON (Alliance News) - Troubled RSA Insurance Group PLC Tuesday said it has appointed former Royal Bank of Scotland Group PLC boss Stephen Hester as its new chief executive, as it seeks to recover after discovering a GBP200 million accounting black hole in its Irish business.
Hester, who was replaced as RBS chief executive by Ross McEwan in October after five years at the helm, will earn a basic salary GBP950,000 a year at RSA, with a potential for a bonus. RSA said 50% of any bonus award must be deferred into RSA shares for three years.
The new chief executive will be granted an opportunity over shares in the long-term incentive plan, with his first grant in 2014 to have a face value equivalent to four times his basic salary. Annual grants will, thereafter, be no higher than 230% of his salary.
Hester replaces Simon Lee, who resigned in December. Martin Scicluna, who has been acting in an executive capacity since Lee's departure, will revert to his role of non-executive chairman.
RSA, which is currently conducting a review of its business, to be published alongside its full-year results on February 27, said that timeline is on track.
"The challenges of recent months have demonstrated that we have not lived up to our stakeholders' expectations and performed to our true potential. We have an obligation to deliver shareholder value and excellent products and services that provide everyday protection for our customers," Hester said in a statement.
?I look forward to getting started immediately and working closely with the board on the business review to ensure that we are able to deliver strength and value to all of our stakeholders and re-emerge as an attractive solidly performing group,? he added.
At RBS, Hester led the 81% UK state-owned bank back from a damaged balance sheet and disastrous acquisition of Dutch bank ABN Amro that had forced it into a taxpayer bailout. In addition to its Irish woes, insurer RSA recently has been hit by big weather-related claims.
RSA shares Tuesday closed at 96.353 pence, up 0.103 pence, or 0.1%.
By Samuel Agini; [email protected]; @samuelagini
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
RBS.LRSA.L