Tuesday, January 31, 2012
Hester and Goodwin Won't Draw Line Under Bonuses and High Pay
One cannot feel much sympathy for guys rich enough to buy all the property one can see in all my local estate agents offices combined, when the average age of first time buyers is heading towards 40. But Fred Goodwin, as we- not to mention Fred- must now call him, has suffered a humiliation usually reserved for criminals; yet he has broken no law.
Hester, we learn was, like Fred, a gifted comprehensive school boy who just had loads of talent at banking and did a remarkable job at RBS in clearing up the mess Fred had created. Hester was entitled by his contract to a bonus but it was discretionary, as Lord Myners, who wrote it, tells us. Maybe, by the standards of his peers, Hester has not been paid such a huge amount. By any other standard he has though. We have also to acknowledge that Hester has drawn nearly £12m from RBS since 2008 and a long term pay deal in the works might soon deliver him a further £8m.
These sums were conceived when banks still thought they were entitled to continue with their mega-wage culture but since then the cuts have bitten; people has grown angry and bitter. Politicians have noticed the change of mood and are reacting to it at last. The two bankers have both been scapegoated to a degree, but they have received no more than recipients of such huge socially unjust salaries deserve.
In the political game on 'reforming capitalism' this set must go to Miliband; he launched the line of thought with his 2011 conference speech and has been effective in pursuing the RBS bonus issue, finally precipitating Hester's decision to forego his bonus. Cameron and Osborne have both seemed reluctant to move by comparison and Ed has chalked up a small but significant victory, for which I say at least two cheers. And it won't end here. Bonuses to other RBS staff are due in the near future and Cameron will find he faces the same dilemma all over again. Moreover, other mega-bonus payments to the likes of Bob Diamond are also hanging fire. Creating a 'fair' form of capitalism for the 21st century might prove to be the theme which Ed Miliband can both build on and from which he can prosper.
The problem for Ed and the rest of the Brownites is that their mentor, the best ever Chancellor (according to G Brown), did nothing to address the issue of crazily high pay during his thirteen years in the two greatest offices of state.
Back in 2007, when RBS beat Barclays to the takeover of ABN Amro, even the GroaningBeeb said "Barclays' failure to pull off the deal will inevitably raise question marks about its future strategy". At the time, everybody was impressed with Fred's perspicacity. He had made RBS the world's largest bank (by asset value) during his tenure.
He was knighted in 2004, by the Liebor guvmint, starring Miliband E, who is currently frotting himself into a coma now that the federastic Cameroon has revoked said K.
So, Liebor, having agreed that Fred was a hero, knighted him, agreed to his pension to get rid of him and struck a deal with his replacement. Immediately they were out of power, they started using both of these people that they had been so generous to while in power, as whipping boys and ways to whip up public resentment (that didn't exist among Liebor voters when they were in power,apparently)
Had Cameroon a pair he would have "These deals were agreed by Liebor when they were in government and I can't understand why they're complaining now." If he were an astute pol he would have said "These deals were a bad deal done by Liebor and I'm calling time on them behalf of the hard-working taxpayer. But because he wants nothing else than to say one day "I was Prime Minister, you know" he has opted for the weakest possible option: to bow to faux outrage and use it as a diversion for some of his other unprincipled actions. It speaks volumes that the only twat who claiming victory over this is property millionaire Miliband E.
If this sorry saga fails to make you question your tribal Liebor allegiance and doesn't make you see why there is no difference between any of the major political parties, then you are definitely part of the problem.
The point to make though is - the Shred was knighted for services to banking. He's now brought the whole sector into total disrepute, which may be a service to the rest of us, but certainly wasn't a service to banking. Therefore, the original reason for awarding the knighthood sort of fell by the wayside, and to leave it in place merely looked ridiculous.
What I look forward to is the day we can go after some of these peers who have been convicted of crimes - e.g. Archer and Taylor - and strip them of their titles.
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