January 29, 2012
What is it about bankers’ pay that makes the hard-pressed majority feel that finance capitalism is a conspiracy against them? Could it be that, more than three years after the credit crunch of 2008, we feel that the unfair rewards in the sector that caused the crisis continue unabated? Could it be that the rewards now seem even more unfair because we, the taxpayers, put up the security to bail out the banks? Could it be that we feel that politicians, who mouthed slogans about fairness and how they would put an end to excessive pay, have played a cynical game? Could it be that the way banks pay their top people seems designed to confuse us, even when we, the taxpayers, are their shareholders.
All of those. The fuss over the bonus awarded to Stephen Hester, boss of RBS, a nationalised bank, has been running all week on the basis that it was conveniently just under a round £1m. David Cameron, one moment has been saying it was nothing to do with him, the next moment claiming credit for having cut it to 60 per cent of what it could have been. As we report today, Mr Hester’s bonus turns out to have been a highly coloured decoy designed to draw outrage away from the main story, which is that the total sum he can hope to collect from his three years in charge of the bank, already heading towards £39m, could reach £50m in a couple of years more if the share price performs well.
That we have been distracted by a tiny detail in a show of monstrous greed is bound to leave us feeling once again bamboozled.
As Paul Vallely argues on the previous page, something has changed in people’s perception of fairness, and it is simply impossible for Mr Cameron and Nick Clegg, his accessory in inequity, to maintain that we are “all in this together” when such vast riches are lavished on a public employee at the same time as capping the benefits of the poorest.
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