Congratulations to RBS’s hundred plus (200/300?) new millionaires, but why the disgracefully low transparency?
There was a telling moment in RBS’s press conference this lunchtime.
There was a telling moment in RBS’s press conference this lunchtime. Responding to a perfectly legitimate question about the number of bonuses of more than a million pounds paid out by the most bankrupt bank in the world, both the chief executive Stephen Hester and chairman Philip Hampton sounded incredibly defensive. ‘Why do you want to know?’ said one of them, as they attempted to work out their official figure for how much a bus driver earns (One handy RBS fact: if you strip out the investment bankers, RBS staff are apparently paid less on average than a bus driver).
They eventually volunteered that there were “more than a hundred” RBS investment bankers who were earning ‘million-plus’ bonuses, but would not say exactly how many.
I have to say, from my perspective, given the extent of taxpayer bailouts, there is a disgraceful connivance in low standards of transparency between the Treasury, RBS & Lloyds.
On RBS’s refusal to give a number on the precise number of millionaire bonuses given as it makes multi-billion losses and calls on billions of forms of support from taxpayer, take a look at this from America. In July of last year New York State Attorney General Andrew Cuomo published an exhaustive list of the bonus bands for bailed out banks in America.
From that we know that Bank of America had 172 bonus millionaires, that the top 4 received $64m, that 8 individuals received bonuses of more than $8m etc etc. At Goldman Sachs, 6 individuals got $10m plus, 78 got $5m plus, 95 got $4m plus, 212 got $3m plus, and 391 got $2m plus.
There is no excuse for these numbers not to be published here. They are a legitimate avenue of inquiry for taxpayers wanting to know just how much bailed out bankers need to be paid to leave RBS in a state where many tens of billions of pounds can be recouped.
On top of that, it is clear that many of these bonus recipients did not repay similar bonuses from earnings from 2003 to 2007 which were the proceeds of what the FSA’s Lord Turner has called “illusory profits”.
Thankfully, Hester rolled back on his totally unverifiable comment, made this morning, that had he been able to pay more bonuses, RBS would have made a billion pounds more.
However, his media availability has been relatively poor. After giving ten minutes of bizarre sanitised clips to the in-house media service ‘the newsmarket’, you won’t see Mr Hester being held to account by Jon Snow, or Jeremy Paxman or the like.
I can not imagine a more important focus for legitimate journalistic inquiry than what has happened to tens of billions of pounds of public money.
RBS does rather well compared with Lloyds. The boss of Lloyds’, Eric Daniels, is doing no broadcast interviews. Lloyds well-paid PR executives have even barred all broadcasters from Eric Daniels’ only press conference.
That’s quite some level of accountability for the 42 per cent stake that taxpayers hold, which saved Lloyds from collapse. Remember that, the next time that Lloyds-owned Halifax tries to convey its openness with cuddly staff-driven adverts.
For some context, we at Channel 4 News have done lengthy, challenging interviews with Barclays’ John Varley, with HSBC’s Stephen Green, Standard Chartered’s Peter Sands etc.
Yet the Treasury’s approach is even more concerning. The rarely media-shy Lord Myners, City Minister, pulled out of all TV interviews at lunch time, apparently because he didn’t want to overshadow Stephen Hester.
There are of course entirely different questions to be put to the banking executives, and the man who negotiated the taxpayer’s vast investment in these executives. It is the Treasury that can determine levels of transparency, it is the Treasury that had the power to veto excessive bonuses. (Oh yes UK Financial Investments, the ‘arms length’ body that holds taxpayers’ stakes, also refuses to do interviews).
It’s worth saying in the Treasury’s defence that they under proposed new laws, all banks will have to disclose considerably more about their pay practices, but that’s only next year, if the laws pass. For now, the lack of transparency and accountability is really rather concerning.
Anyone would think that there is a major test of public opinion around the corner.