To Bonus or Not to Bonus

Taxpayer-owned bank RBS is paying its chief executive Stephen Hester a bonus worth nearly £1 million for his work in 2011.RBS shares fell by 48% last year, this man  is to receive the 3.6 million shares  at the expense of the taxpayer he is already being paid £1.2 million.

Westminster is not happy - well Westminster guess what neither are we !

  A Lib Dem minister asked  the banker to waive the payout. Labour put pressure on Cameron to intervene.

  Mr Hester received a bonus of £2million last year but this was paid in shares, the value of which has halved since the bonus issue, which in effect means his bonus was around £1 million last year if cashed in now.But that's not a bad little earner any way, and shares can go up as well as down.
Shadow business secretary Chuka Umunna gives his take on the bonus"Ministers have spoken of the need for greater shareholder activism but despite the government being the largest shareholder in RBS, have failed to rein in excess."The deputy prime minister, prime minister and others have tried to suggest that the bonus framework was set by the last Labour government which is simply untrue. RBS has been very clear that the remuneration committee of the board of the bank had discretion in this case."Because his bonus is being paid in shares, Mr Hester could end up receiving well over £1 million."RBS missed its lending target in the third quarter of last year and net lending to businesses by the country’s banks fell in nine out of the last 12 months."

  Jeremy Browne, a Liberal Democrat,says "There's a question of honour. Even if there's a contractual opportunity for him to have a bonus it doesn't mean he has to accept it.""He should reflect on that. He is effectively a public servant in a bank which is almost completely owned by us the taxpayers."He needs to think like a public servant who has a duty to his country, not just his own wealth."

How out of touch is the government - its not contractual so they can intervene, he hasn't hit his targets and he is already having a huge salary. 

This issue is about a whole host of  things - perception, PR , taxpayers ownership, government governance , payouts for non achievement . This is not in the private sector - this is public ownership so different rules do apply. 

So he is threatening to go - well my view on that ,don't threaten - there's the door feel free to walk through it .At that salary I am sure he is easily replaced.

People are worrying how to pay bills , how to feed their family and how to keep warm, we have a huge problem with youth unemployment and jobs. This man and his bonus fade into insignificance when measured against these things.