Tuesday 29 January 2013
RBS Bonus row, part 69....
But at £500 million, of taxpayers money, much of it will go to the US Treasury, at a time when our own deficit is climbing and the share of the state taken by our Government is climbing too (back to 49% of GDP now and rising).
Moreover, £250 million is set aside for bonus's to bankers at RBS, this will really stick in the craw of the public. Whipped into a frenzy of hate against bankers by the Anarchists and an ex-Labour Government who seek to apportion blame for their failings elsewhere.
Yet RBS has shrunk its Investment bank, where much of the damage that led to a £45 billion state bailout was done, by some 70%. Of those, not all would have been in place in 2008. So we reach a moment where those under attack are not those who committed the acts of folly.
Luckily, the bank does not have clawbacks in its bonus system that will enable it to reclaim much of the past bonus's of those who have failed. The system is improving. However the principals have not changed and I am at a loss to understand why. Clearly bonus's are paid for performance and if the overall performance is leading to losses then extra rewards should be verboten.
There are plenty of unemployed bankers, and increasingly, algorithms, that can replace traders who say they are special at RBS. Also there are plenty of good people there who will not leave. If the price of respectability at the institution is another few years of no bonus's until the place really is on the mend, then that is the most sensible course. Why every year they go through this charade and wind-up is beyond me, performance related pay should mean just that, performance of oneself and one's organisation.
I note that this week politicians are also voting on their own pay rises again, but more on that tomorrow...