The banker, his bonus, and why I couldn’t care less

Stephen Hester, the boss of The Royal Bank of Scotland, our famously publicly-owned bank, has been paid a bonus of £963,000 in shares. Shares that immediately fell, so they are presumably now worth a little bit less. In case you haven’t been paying close attention, and are assuming from the universal condemnation and frothing outrage that has been spilling out across the airwaves all day that this man is some kind of arch-criminal, I should remind you that this handsome payout is actually rather less than his contractual entitlement. An entitlement that was contracted under the Labour government as it happens, although this appears to have escaped Ed Miliband’s notice. Having said that, Mr Miliband seems almost as exercised by cut price chocolate oranges as he is about Mr Hester’s bonus, so it’s hard to know just how cross he is since his crossness seems to be somewhat uncalibrated.

Although I am being invited along with every other British taxpayer to become incandescent with rage, I have to say that I’m pretty relaxed about my personal 32p contribution to the largesse of RBS towards its boss. I’d probably only have frittered it away in any case, perhaps splashing out on half a Mars Bar, plus in fact my contribution is probably even less because I’ve divided the bonus only amongst the 30,000,000 individual income tax payers in the country, ignoring payers of corporation and other taxes.

Concentrating the nation’s righteous indignation on this one individual has some rather convenient side effects. First, it neatly avoids having to wonder about massive pay in general, and not only to bankers. Second, it keeps us concerned about shenanigans of a very few people, thus distracting us from such wider issues as mass unemployment and general austerity. In the strictest sense of the expression, Mr Hester is indeed a scapegoat.

So I really can’t get worked up about it. To be honest, I get more worked up about politicians trying to pose as brave defenders of the public’s interests when in fact all they’re doing is scoring political brownie points with a public that’s not apparently very skilled at distinguishing between the wood and the trees.

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4 thoughts on “The banker, his bonus, and why I couldn’t care less

  1. I don’t like it when politicians try to score brownie points, but I still think the bonus was wrong. I don’t suppose you saw the article in The Independent claiming that there was no contractual agreement in place. If that’s true, the government would have been within its rights to refuse Hester a bonus. This is the article I’m referring to: http://www.independent.co.uk/news/uk/politics/government-is-caught-misleading-voters-over-bonuses-6294100.html
    Personally, I strongly suspect the government is lying to us (although I don’t think much of the opposition either!)

    • Thanks for the link! Obviously I’m not privy to the small print of Mr Hester’s contract, but I think we fetishise the issue of this one bonus at our peril. Even if the government had vetoed this particular payment, it’s neither here nor there in the scheme of things, both financial and moral. The issue isn’t this bonus: it’s a system in which a bonus such as this is even possible.

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