The have received a mauling in the press and blogosphere about the amount being paid in bonuses following their Government bail out. But yesterday Royal Bank of Scotland boss Stephen Hester has announced there will be an overhaul of the bank's pay structure.
Amongst the admissions yesterday to the Treasury select committee was that pay in some areas of the business were too high. But is this too little too late in reaction to the public outcry that while others in other lines of work are struggling, the bank had announced the go ahead to £1bn in bonus payments in a year when billions were lost. However he did say that the bonuses would be being paid saying "if [he] thought it was a responsible move, [he] would not pay a penny". He said that many of the employees did exactly what was expected of them and deserved their bonuses.
However, without the back up from the Government the bank would have failed many of those employees and they wouldn't even have had jobs let alone the ability to pick up a bonus. Surely that is the crux of the matter. These bonuses are not being paid out of the bank's profits from last year, as there were none just a whopping £28bn loss, but from the public purse as we bailed them out.
During the grilling before MPs he admitted that it could take as long as five years for the bank to merely reverse the serious failing of the last annus horribilous. Whilst Hester admitted that the risk-management systems side of the business needed a major overhaul, it was their spin at the roulette wheel that overstretched the bank, he somehow still fails to see that the public cannot understand. Nor will they accept that when a business has failed so dramatically that they should have the ability to hand out bonuses of the scale that some have been mentioned. Merely claiming that no bonus of any sort would be given to people associated with the vast losses the bank had made is not enough the others have to be reviewed too in light of the current financial state of the institution.
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