A fair day's pay for...? (From The Northern Echo)

A fair day's pay for...?

2:44pm Tuesday 31st January 2012 in Comment

THE furore over RBS chief executive Stephen Hester’s bonus is entirely understandable, and it is peculiar that it took so much pressure and so much time for him to agree not to accept it.

From a public relations point of view, it is appalling for a company boss to make so many people redundant and then expect to pick up such an enormous bonus . this is poor manmanagement – even if Mr Hester was entitled to the bonus.

There must be some doubt as to whether he is entitled to the bonus: RBS’ share price has fallen by a third since he took over, so it is difficult to see why he is being rewarded quite so handsomely.

However, there must be some care that this righteous indignation does not make us forget an old maxim: if you pay peanuts, you get monkeys.

Clearly, leading a state-owned bank, with huge debts, back to profitability requires a degree of skill and talent that many of us do not possess. Therefore, Mr Hester does require to be fairly rewarded.

The key word is fair. Mr Hester’s basic salary is £1.2m, plus £400,000 in pension contributions, plus the £963,000 bonus he was hoping to pick up. More than £2m.

We are in the midst of the biggest reversal in living standards since the Twenties and here is one man earning in one year a sum of money that to nearly all the population is a lifechanging lottery win.

Given the role the banks have played in the current crisis, and given the fact that Mr Hester is practically a civil servant, the public – and politicians of all colours – sense that this cannot be considered fair.

They will also look in amazement if Barclays chief executive Bob Diamond takes his reported £10m annual salary and bonuses this year.

We don’t begrudge clever men their success and their wealth but, equally, they must be aware of the great hardships being endured all around them.

If we really are all in this together, the gap between the poorest and the richest needs to be narrowed.