They were at it again this week, First came
Meanwhile, over at 80% taxpayer-owned RBS, there was indignation at news that funnily enough no, the Government would not let it pay staff up to twice as much as their salaries as bonuses, not when the bank was still to complete its restructuring (and after it had posted its sixth consecutive loss this year, of pound(s)8.24bn). It will have to make do with bonuses of 100% of salaries instead. Cue dark mutterings about the "commercial and prudential risk" the bank now faces as a result.
What this depressing spectacle makes abundantly clear is that very little has fundamentally changed in the mindset of those running
Perhaps the banks thought they just had to sit tight while the economy improved, that us worker drones would forget about their preposterous reward packages once we had a little more money in our pockets for bingo and beer. But the issue just won't go away. The sense of British decency has been roused. More than a third of
It all comes back to the same, flimsy argument, that banks will supposedly haemorrhage all their most talented staff, and thereby lose their competitive edge, unless they pay what their most extravagant rivals pay, both here and abroad. It neatly absolves individual banks from any moral soul-searching; they merely spread their hands and claim to have no choice.
What this amounts to is an admission that no senior banker can be expected to have any sense of proportionality about their pay. The greediest and the most talented are assumed to be one and the same. But are those who demand the biggest rewards necessarily the most talented? Why not call their bluff?
In other areas of the economy, such as the public sector and even many other parts of the private sector, talented and highly-skilled people do not automatically flee to jobs with higher rewards at the first opportunity. Medics, for instance, get paid vastly more in
Even if one accepts the rather doubtful generalisation that those working in commercial settings are likely to be more motivated by money than those working in the public or voluntary sector, a sense of proportion and fairness still prevails when it comes to pay in most parts of the private sector. Most people consider their outgoings and future liabilities, and how much they need to cover them, and hold their salary against them when judging how well they are paid. Median gross annual earnings in the
It would help banks with their PR, of course, if they weren't in the habit of paying out huge rewards when profits were going down. Their riposte to this is that it would be a mistake to take a short- term view and that only by retaining the best staff can they serve the long-term interests of shareholders. But
The question remains of what would happen if banks were to lose their top tier staff following a bid to get banker pay under control. If banks were run instead by staff who were paid well but fairly, would unwise strategic decisions be made, against the long- term interests of shareholders, bringing the bank to the brink of collapse? Where is the evidence that they would? In fact, does that not sound rather more like RBS under the stewardship of its (extremely well remunerated) former chief executive
It is clearly pointless to expect the boards of banks to do anything of their own volition about excessive rewards. The Business Secretary
It is really shareholders who are best placed to tackle this issue.
They were at it again this week,