Bonus or Bogus?
Bonuses are usually paid out when targets are hit or when a business or individual is performing well, this isn’t the case in the UK banks. Despite the recession and huge losses the banks are reporting, they still chose to pay out ridiculous bonuses to top chiefs. Barclays is the latest bank to be expected to pay out.
Top bankers at Barclays are expected to have millions of pounds in bonuses handed out in the coming days in a move that could trigger fresh controversy about City pay. Barclays boss Bob Diamond is expected to pocket up to £4m. The group executive has declined to comment on his bonus and it is no surprise, despite falls in profits and HM Revenue scandals, top bankers are reaping rewards from underperforming banks.
Bob Diamond has admitted that the bank's return on equity – a key measure scrutinised by shareholders – has fallen well short of the 13% target he had set for 2013. Surely this is a cause for concern, it is no surprise there is public anger amidst the City Pay and Bank Bonuses.
Just last week, Barclays bank was forced to admit that HM Revenue & Customs had to put an end to 2 of its staff incentive schemes designed to avoid up to £500m in tax. Barclays is thought to be preparing to release millions of pounds of shares to its highest-ranking staff under performance-related pay deals handed out in the past.
Among those in line for the rewards are Rich Ricci and Jerry del Missier, who run the Barclays Capital investment bank, Tom Kalaris, head of wealth management, Antony Jenkins, head of the retail bank, and Robert Le Blanc, who is head of risk.
Under Project Merlin, an agreement set between the banks and the government, the banks have to declare pay deals outside the boardroom. HSBC was the first bank to comply with these rules and last week, they announced the top eight highest paid executives who shared £30m between them.
The public anger seems to be having an effect on some of the top dogs, a few have declined their bonus, and it seems they aren’t as greedy as we think. Current LBG boss Antonio Horta-Osorio has already declined his annual bonus amid on-going public outrage over excessive banking-sector pay at state-rescued banks. RBS chief executive Stephen Hester was forced to waive his £963,000 annual bonus under intense political pressure from Prime Minister David Cameron.
With the recession having an effect on everyone, many people are unemployed, unable to get work, businesses are forced to make redundancies or close completely. Our forces, emergency services and councils are forced to make huge cuts in order to make up thedeficit left behind from the last government. Bankers Bonuses are unrealistic and outrageous, a bonus is given when targets are met, staff and businesses are performing well and making profits. The money used to offer bonuses to poor performing banks could be put to much better use than lining the pockets of the top dogs.