It's, in my opinion, impossible to defend payments to senior RBS staff. Most especially the fact that RBS chief executive Stephen Hester will enjoy a pay deal worth around £7.7bn if he meets his targets.
There's not much more to say really, except that here is the clearest evidence of the remaining moral bankruptcy of banking and those in the Treasury who have let this happen. And yes, that does mean I am criticising New Labour too. Let's hope it is history.
No wonder politicians in Europe have approved a Robin Hood Tax.
And no wonder that Mervyn King says we now have our last chance to end this abuse.
But have we got a Chancellor with the courage to take note?
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You’re right Richard, it’s crazy. I’d fire the chief exec and all the top earners and replace them with middle-ranking civil servants on (say) £60,000 a year or so. They’d be much cheaper AND they’d do a better job.
The crisis of 2008 provided an excellent opportunity to remould the whole of the UK banking sector. Instead what we got was banks carrying on just as before but this time using taxpayers’ money to do so.
Oh well, the bubble is re-inflating so there will be another crisis, and another chance to sort the whole mess out, in just a few years…
No doubt you saw the crass and vacuous piece in the Guardian yesterday, Richard, by great apologist for UK Banking Angela Knight. Even she was reduced to spinning what’s already been spun so many times it’s basically threadbare.
What was absolutely priceless about the Hester announcement was that it was made on the same day the police were getting a hammering on pay and conditions (justified in many respects I have to say). I wonder whether their “enthusiasm” for policing the demonstrations that will take place throughout this year will be diminished as a result 😕
@Howard
Or we could take advantage of the global labour market. There must be plenty of very well educated and clever Chinese citizens who could do the job at one-tenth of the pay demanded by Hester et al.
Hi Richard,
I agree with your view but there is a typo in the article, it is 7.7 million not billion.
Interesting topics by the way.
Thanks.
Gareth
I have just heard from Radio 4 that Northern Rock is also paying bonuses despite making a loss. How much longer is this going to be allowed to continue? Well of course the answer is that there is no end in sight for this nonsense while the Coalition is in power and I suspect the same if Labour regain control. As citizens, we just seem completely powerless to do anything constructive about this, and I doubt whether Mervyn King in his regulatory capacity will either. I expect Osborne not to renwew King’s contract, especially after the disparaging comments published by Wikileaks expressing King’s ‘great concerns’ about Cameron and Osborne. Actually we all now have the same concerns about their competence, but unfortunately thousands of people are going to suffer as a consequence. We certainly do live in a dysfunctional democracy.
@Teresa Harding
Probably time for a new political party that isn’t governed by the Alumni from a certain Neo-liberal Oxford degree course.
At the moment the only political choice is one of colour not fundamental economic policy.
@Stephen
Excellent idea!
@Howard
i don’t dispute for a moment that the high rewards for senior people in banking is, in essence, a cartel and that people are being paid vastly disproportionate amounts of money even when they do achieve good things, never mind when they don’t. however, let’s not pretend that any old joe can run a huge and complex multinational organisation. they can’t.
@theboynoodle
I agree – but the skill is more common than you might think
This guy was already awarded a £2m bonus for last year’s losses so where has the additional £4m bonus come from? His initial bonus, disregarding his base salary, is the same as the FTSE 100 CEO average and most of them make a decent profit and yet they still give him more.
While the government wages war on all public sector workers to justify salaries in excess of the PM’s and give up (extremely modest) bonuses, they are powerless to influence a company in which we own 83%.
And some other questions need answering too. Why are we allowing excessive reward-for-failure in a public body? When will Cameron seriously tackle the bonus culture?
I suspect the banking elite are taking as much as they can now before
either there is another crisis the result of which will mean they really will pay a heavy price or their excessive rewards are finally regulated or taxed to oblivion.
@theboydoodle
Banking is probably the most powerful profession in the world for which you need no formal academic qualifications for entry (bit like being a politician). Says it all. I’d like to see them try running a health authority, inner city comprehensive or lead a battalion of troops. They would fail miserably.
doubtless. though i expect that most of the people, bank-side, who created the crisis have the skills. it might appear to the world that they didn’t know what the were doing. but they knew exactly what they were doing. they were accruing obscene personal benefits within a system which not only allowed it, but which, at the very least, inadvertently encouraged it.. but often actively desired it. and thus far, not a lot has changed.
I don’t go all the way on this that there are many people that can run an international bank- if it were the case then the Board should be fired for paying too much. I would not mind, if and I mean, if Hester was paying the full 50% marginal rate Income Tax on his whole remuneration. The same argument applies to top Premier league footballers
there has to be a commercial reward for scarce talent. I’ll admit there is a moral dimension – but who is going to throw the first stone- not me
I should be getting on with my work- self employed people get no freebies!
@theboynoodle
We can agree on much of that