The front page of this morning’s Financial Times describes the struggle between the Royal Bank of Scotland and PM David Cameron over executive pay. RBS chairman Sir Philip Hampton’s salary of nearly $2 million is set to be supplemented with a bonus of at least that hefty size. Cameron is calling for executive pay restraint, but the RBS board is intransigent.
The FT quotes a “senior banker” as saying that if Sir Philip doesn’t get a bonus, it would demoralise staff members by signalling that they now effectively work for “an arm of the civil service or a utility rather than for a bank”.
Let’s review the facts for this unnamed champion of free enterprise.
The Royal Bank of Scotland exists today only because the UK taxpayer bailed it out three years ago. The government owns 83% of the bank’s shares. Rather than be grateful for this generous welfare programme, the wizard of private industry quoted in the article is outraged that he might have to accept some public sector style restraints on compensation.
Cry me a river.