It's a hoary old chestnut, complaining about the pay and bonuses awarded to the higher-ranking executives of large companies or banks, but that does not mean that it's never justified. This is particularly true when the individual is working for a company which is largely owned by the UK taxpayers.
This bit of news will cause the usual fury among those of us who earn a living wage, rather than what's euphemistically called 'remuneration'. It's not that I'm envious of his income - personally, I've never been motivated into a job by money alone and have, in the past, actually felt guilty about earning a good wage during periods when I didn't think there was sufficient work about for me to be earning it. I think most people would feel the same way – it's not about that, it's about fairness and the justification for him, and others like him, earning this kind of money.
His bank, 82% of which is in public ownership, and which has made thousands of people redundant during its recent struggles, seems nonetheless to have been able to take this decision without consulting that 82%, or anybody else. This seems a contradiction to me – a private company quoted on the stock exchange is answerable to the shareholders at each AGM, and subject to a vote approving the pay of the directors at the same annual get-together. They do, of course, almost always see those votes passed, but they are at least subject to that scrutiny, subject to the questioning of the people whose investment has helped support the organisation financially.
I don't recall the taxpayers being consulted on this one. How has the bank's board been able to take such a decision without any apparent input from outside? That's what annoys me about this, not the amounts involved specifically. The bank's board will doubtless argue that they are legally obliged to honour promises made in his contract, and so they are. But is it beyond the wit of the people who write these contracts to build in clauses which limit or remove bonuses during periods of financial loss, in case of a required publicly-funded bale-out, etc? They're supposed to be professionally competent people (though perhaps some of the banks' results lately show the reality there as well).
The other line we're constantly fed is that the top financial employers have to pay these salaries at board level to get the best people, that if they didn't, they'd 'go elsewhere' and their great talents would be lost to the country. I'd like to know where exactly it is that they're supposed to go? Which land of milk and honey is enjoying such immunity from what's a global economic problem that they could head off there in their droves and earn these riches, while at the same time still working for one of the top banks? It's a world economy – most of the large banks or financial institutions operate internationally, so a dire set of results in Britain, for example, will be felt outside our borders as well. The same applies in reverse – witness the effect that the crisis in Greece could have on the entire European Union. So that argument simply does not wash.
This is not a personal thing against Mr Hester – he just happens to be the man in a suit currently sitting in the media's cross-hairs, no doubt there are numerous other people earning considerably more, in considerably less public circumstances, with just as little justification. But he could take advantage of that publicity by setting an example and refusing the bonus, settling instead for struggling by on his reported £1.2 million basic this year. I'm not going to hold my breath, though.
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