RBS would be better off without their bonus-hungry directors
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By Luke Bozier / @luke_cb
Today the Royal Bank of Scotland, the most beleaguered of British financial institutions, returned to the limelight in a storm over the board’s intentions to pay a total bonus fund of £1.5 billion to investment bankers. Labour’s City Minister, Lord Myners came out with his guns blazing this morning saying that the reason RBS is even turning a profit in the first place is due to the “benign factors” created by the Government’s economic stimulus.
This latest development in the long-running saga between the Treasury and RBS is sure to make the Edinburgh-based global bank even less popular in the eyes of folk all around the country, who are still experiencing the effects of the implosion that our economy suffered predominantly at the hands of large banks like RBS last year.
Lord Myners, who pointed out that the current average wage in the UK is £20,000 estimated that the investment bankers who will receive these bonuses could get up to and beyond £1 million each. RBS defend their position by saying they have a legal duty to “act in the interests of shareholders”, but with the British taxpayer owning 70% of the bank’s shares, perhaps the board should pay more credence to the wishes of the Government who represent the people earning average wages and struggling to pay their mortgages.
I’m not one to bank-bash for the sake of it. The financial services industry is a huge part of the British economy, and has created thousands of jobs and contributed to growth in tax receipts which have enabled the Labour Government to build hospitals and schools. But when banks seem to be so determined to continue the behaviour which led to the biggest financial crisis in 70 years, I think the Government is right to intervene.
RBS directors are threatening to resign if the Treasury vetoes bonus plans. Perhaps the bank, and the economy, would be better off without them.
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