… or, Why Bankers Can’t Earn Money
Stephen Hester, the Chief Executive of Royal Bank of Scotland, is handing back a bonus of nearly £1m. Under intense pressure from the media, and members of both the government (Lib Dems in the main) and Labour opposition, he decided to refuse the bonus as it was seen to be a distraction from the running of the 82% taxpayer owned bank. This has been seen as a key victory in the battle against excessive boardroom renumeration.
I’m sure it’s not going to be a killer for Hester. His total package for the year will be disclosed in March, and is likely to total around £8m. But I’ll get to the point – I don’t think he should have given it back. I think he deserves it.
Firstly, there is the question of performance. Hester was brought to the bank after it was bailed out by the then Labour government in September 2008, tasked with turning the bank around. He has. While the share price is half that from when the government pumped in £45b, the bank is back in the black and making money. This is set against an economic climate when profitability is the exception, not the norm.
Secondly, there is a question of fairness. Hester was hired by Labour. His contract was agreed a long time ago. Why now, 3 years on, is it a party-political issue, with Labour kicking up a hell of a stink? I find it hypocritical in the extreme to give a man a job on one set of terms, and then argue against them when it suits you in the future. Hester is being used to point score in Westminster.
When you disregard the money involved, this is a contractual issue. Should an employer be held to their promises? Of course! I for one would be fucked off enormously if my bosses decided to change the rules after I fulfilled my side of the deal.
On top of this, the bank is still owned by you and me. If Hester is good at his job, why shouldn’t he be paid? After all, his incentives reward us too, not just him. If we are ever to see the investment made in the bank returned to the public purse, someone has to run the bank, and well.
The money is exorbitant, don’t get me wrong. But just because it’s unpalatable, doesn’t mean it’s not right. Hester should get what he deserves, and the politicians should solve the problem at source. Hester is a scapegoat, pure and simple.
Like A Sir
Via my lovely cousin Pippa:
As I write, I’m also watching Britain’s Gay Footballers on BBC3. Since Justin Fashanu came out, no other player in Britain has. There are gay players. But as we’ve seen with the recent spotlight on racism, football is still full of bigotry, which doesn’t create an environment in which a gay footballer could feel comfortable. However, in my eyes this is a reflection on our society, not our (my) game. There are millions of fans like me, and I know I would support any footballer who came out, never mind what team they played for. Whether or not a footballer will come out remains to be seen. But there is one name that footballer will inevitably be called – hero.
Mick McCarthy gets scared of nothing
In other news
Just love these guys:
The trumpets play the live long day, but they sound so forlorn.