The chairman of part-nationalised Royal Bank of Scotland has admitted that bankers' pay is "astonishingly high".
Sir Philip Hampton told the BBC it was difficult to defend the gap between what most people earned and how much some bank staff were paid.
But he added that banks had to pay high sums if they wanted to keep "top" people.
Sir Philip told BBC Radio 4 that "bankers' pay continues to be astonishingly high", adding: "If we don't pay our top people they leave very quickly.
"Our top people are very much in demand and we have seen a significant loss of our top people."
RBS is 83% owned by the taxpayer after it was bailed out by the government.
At the bank's AGM earlier this week, Sir Philip pledged he would listen to investor concerns over its new bonus scheme for top bosses.
A quarter of the total payout - which could net chief executive Stephen Hester a maximum £4.8 million - is linked to the RBS share price, which has risen strongly in recent weeks.
Two months ago, RBS shares were around 30p but they have now risen sharply to above 50p - potentially triggering the award of 30% of this part of the scheme, worth around £360,000 to the RBS boss.
Sir Philip told shareholders at the meeting that when the new scheme was finalised, "the share price was sitting at a much lower level than it is today".
