The row over RBS chief, Stephen Hester’s bonus is fascinating. The public are clearly disgusted that the boss of a bank bailed out with our money is getting a huge salary and bonus, especially while many people are feeling seriously squeezed. Labour, despite being in charge when he was recruited and his contract set, are making the most of this with opportunistic attack on the government’s “inactivity”.
Very few people in political life feel comfortable challenging this wave of public anger, there are no votes to be gained in defending big money bankers. Yet I didn’t enter politics to take the easy path.
|A wealthy banker|
I have met a lot of talented people in the banking industry, that said I have met just as many in the civil service, armed forces, teaching, medical professions, publishing industry etc. I know a lot of people who would get to the top of whatever profession they were in, yet it seems to be people in financial services that earn the mega-bucks.
Them and footballers.
I think that top end bankers and footballers get paid much more than they need or deserve. Their salaries have become divorced from their skills and/or experience and are driven by a highly competitive environment and use of their wage levels as a quasi marketing device. That said I cannot see how any one bank or club could unilaterally change this.
Let’s take the football analogy a bit further. Imagine that far from one of the top teams in the world Manchester United turned out to be a basket case and huge amounts of public money are used to keep the team afloat, Sir Alex is fired and the public calls for his knighthood to be stripped. In order for us to have any chance of getting our money back we need Man U. to win the Premiership, FA Cup and Champions League.
|Some very wealthy footballers|
How would we go about resurrecting the newly nationalised team? Would we persuade Roberto Mancini to take over at the club, paying him more than he currently gets at City and let him buy players from other top teams and keep Rooney, Giggs etc?
Or would insist the new manager is paid no more than the Prime Minister and impose a tight salary cap on the players mid season even if it is in breach of their contracts?
The second option would be a good way to assuage our anger but I don’t imagine any of us would realistically expect to win any silverware or get our money back. I am not suggesting for a second that this is fair but it is the reality.
We need to ask ourselves what we want from RBS. Do we want it to make money and repay the nation’s huge investment or do we want it to go out of business? It would seem a terrible waste to have spent all that money preventing it from going under a few years ago only to force it to do so now, and take our money with it.