With all the inevitability of flatulence after Mexican food, the populist success in getting RBS CEO Stephen Hester to give up his bonus is leading to a rash of calls for other executives to be similarly mugged. First up: top management at Network Rail, who are in line for payouts of as much as £350,000, peanuts by top bankers' standards but enough to attract the ire of the politicians.
Well, at least Network Rail is publicly owned (sort of -- its ownership structure is, quite intentionally, obscure), giving the politicians some sort of right to put in their two cents' worth about how the place is run. But of course, the anti-bonus tide isn't stopping there. The next target is Barclays CEO Bob Diamond, who is set to be awarded a bonus way larger than Stephen Hester's -- as much as £10 million in stock, by some reports --some time next week. In an effort to head this off, Labour is planning to table a resolution in the Commons calling for an end to what Ed Miliband today described as a "one-way" bonus culture in the banking industry -- payouts for success, no punishment for failure. (I wonder if all the folks filmed carrying their careers out of Lehman Brothers in cardboard boxes back in 2008 see it that way).
The threat of a Commons debate was what persuaded Hester that he had no choice but to surrender his bonus, so it will be interesting to see whether Diamond and the Barclays board show any more backbone. Barclays, after all, did not take any taxpayer money at the time of the financial crisis; instead it went out and raised capital from Qatari investors, a decision for which it was, bizarrely, criticised at the time by the one and only Vince Cable.
There's a strong case to be made that UK executives, and top bankers in particular, are overpaid in relation to the rest of the populace. Even RBS Chairman Sir Philip Hampton admitted as much today. Probably the best solution is worker representation on boards of directors, something that seems to work well in Germany. Not much chance of the Tories going for that, of course, so instead we get the distasteful spectacle of Ed Miliband and his pals launching ad hominem attacks on people whose main crime is that they can't keep their pay packets out of the public eye. It's no substitute for a properly thought-out policy, is it?
Meanwhile, it emerges that Chris Huhne, forced to resign as Energy Minister because he is facing serious criminal charges, is entitled to a severance payment of about £17,000. Any thoughts on that, Mr Miliband?
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