George Osborne defends Stephen Hester's bonus

[JuliaScurr]

Yes, he defended that £1 million bonus on top of the £1 million salary. Remember RBS is mainly State owned after the bail out, so Hester is a public sector worker.
Thanks, George. That clarifies things.
Make sure you tighten up on those 'disabled' benefit scroungers.

BBC now reporting that Stephen Hester has turned down the bonus.

The RBS board now has a serious problem. If every decision they make is going to be overturned by either the government or public pressure, they are not in full charge. It won't inspire confidence anywhere they are doing business and will make the job of getting the bank back into profitablity more difficult. The villification Hester has received has been appalling. I would expect him and many of the senior management team to step down sooner rather than later.

It shouldn't have come down to the decision of the recipient.

It had to, because of the way the Labour government permitted the contract to be written in 2009, and the way they had the National Interest put into an arm's length body.

This whole situation could have been avoided if they had done a more competent job on either of those aspects. But foresight nor understanding of the financial centre just aren't their strong point.

Instead they stand there and whine about a situation that was entirely created by their actions. Very weak.

Oh yes, and I can see the Conservatives would have ensured he got a contract that treated him entirely differently from every other chief executive in banks not largely owned by the taxpayer - not. What went wrong here is that bankers and their boards in general have no morals and do not see morality in the boardroom as being a desirable attribute - it would just be bad for business to care about anyone other than yourself (even caring about the company you work for and its employees would be stretching your caring cells too thin). There is a difference between being entitled to something and deserving it, and between being offered something and accepting it which has entirely passed them by.

And very amusing that the Tories pretend giving shareholders and employees a tiny bit more say on executive pay will make any difference - after all, we wouldn't want the boards looking "weak" by having to do what their shareholders want, rather than what the boards advise, would we? The stupid shareholder doesn't know what's good for business or what he's talking about, unless he's another overpaid executive of an institutional shareholder, of course, in which case he understands the huge importance of overpaying someone just so that they carry on getting out of bed in the morning and doing their job.

Of course, the City spent years complaining it was over regulated and was stuffed full of very clever people who should be left alone to get on with what they were brilliant at and that stupid governments were crushing enterprise and didn't understand anything. Then they stuffed up the world economy because it turned out they didn't understand anything, got given loads of cash so that the entire world didn't go into meltdown and now they are telling everyone to butt out again. They really are stupid. And they think everyone else is stupid...

How does the wider finance sector know what decision is going to be overturned next? There's a trader at RBS who has apparently earned a bonus of £4m. That's the next one the tabloids have got in their sights and, who knows what the outcome of that will be now that first blood has been drawn. A government that doesn't want to openly manage matters but instead rely on pressure behind the scenes and public opinion is not a good way to run a commercial enterprise. And a talented banker looking to change jobs today won't be considering a career at RBS.

Bankers will be jumping ship from RBS not because their commercial decisions are being hampered but because their obscene payouts are not being supported. The finance industry is behaving like a giant tyrant, wielding enormous political power without taking any political responsibility. People don't like tyrants. Rather than leaping about from one sinking ship to another, people working in the industry ought to stop and think about the whole bloody industry and its effect on everybody else as a result of its behaviour and customs. To argue that nobody should ever do anything about your bonuses because you work in a global industry and, effectively, can get away with it, is to argue that the whole world system is corrupt and needs pulling down, because it has absolutely no intention of changing itself.