Friday, 27 January 2012

Bankers and bonuses

There's been a lot of anger today - and rightly so - that Stephen Hester, the boss of the Royal Bank of Scotland, is to receive a bonus of £963,000 on top of his annual salary of £1.2 million. As the Government owns 83% of the shares in RBS after it bailed it out in 2008 with taxpayers' money, it was its decision to award the top up on his already high salary.

The justifications given for paying someone who is effectively a public official such a massive salary and bonuses, as opposed to the much lower but still generous wages paid to senior civil servants, are usually as follows:

1. we need to attract the best people.
2. it was a contractual entitlement we inherited.
3. if we don't pay them this money, the bankers will leave RBS and probably the country as well.

To which I would answer:

1. a lot of the people who steered RBS onto the rocks were also supposedly "the best people" who had to be paid equally high salaries. I'm sure there are lots of people with a working knowledge of economics who would take the job for a fraction of the salary and no bonus.
2. either "Sue us" or pay it weekly by order book at the post office, in pound coins.
3. Goodbye!


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