It really gets to me, this issue of bonuses and the fact that we hear a whole ton of ridiculous excuses from bankers about why they have to pay bonuses.
Especially from Stephen Hester, at RBS – he who said his parents think he gets paid too much.
Why would you say something like that, to a scrutinising committee of MPs… which will be widely reported in the news… when you know the general public’s opinion of bankers is so low?
Anyway, back to the main subject of this rant… sorry, I meant blog!
A couple of weeks ago there was an article from the CIPD that said the recession was likely to cost 250,000 more jobs in the UK economy. Forget the figures that show there were less people unemployed in December… the figures took into consideration seasonal and part time workers. It was Christmas and the number of full time jobs continued to fall.
The CIPD also said that the recovery would ‘jobs lite’, meaning that output would increase but not the number of jobs. In fact, it’ll be 2015 before employment reaches pre-recession levels.
So, Stephen Hester’s assertion that he has to pay bank bonuses to keep his staff just doesn’t wash with me. There will be plenty of staff for the foreseeable future.
Like so many of us, bank employees, right now, should be concentrating on the fact that they have a job, rather than the amount of bonus they are going to get paid.
The other side of the coin, of course, is the issue of bank performance.
In a thick and glossy brochure produced by accountants it is likely that many banks will report a return to profits. For those banks that were managed prudently and didn’t require a bail out by us – the tax payer – great! I’m really happy, because the first responsibility of any business is to make profit. In these circumstances, I’m more than happy for bonuses to be paid.
But for those banks that had to be bailed out, even though ‘officially’ they may have returned to profit, to me they haven’t. Until every penny we injected into them to keep them alive has been paid back, morally at least, they are still in a loss making position…
Which means bonuses shouldn’t be paid.
Whichever way you look at it, the justification that bonuses should be paid, whether to retain staff or because performance has improved, juts doesn’t work.