Friday, 13 February 2009

Lesson for RBS from Barclays

I've received an email from John Prescott updating me on his campaign for the Royal Bank of Scotland to give up their bonus. Last night it you were watching BBC's Question Time you would have heard Kelvin Mackenzie try and defend the bonuses being given by the RBS with one basis being that other banks were giving them.

Therefore you can imagine how hollow that message sounded when I read Prescott's email. In it he points out the fact that Barclays, who haven't taken any Government money, have already reviewed their bonuses for the year. Even in parts of their business performing strongly such as commodities, foreign exchange and currencies will see their bonuses shrink from the average they would have expected. But more telling is that 20-30% of their staff will be receiving no bonus at all.

This is a bank that did not have to rely on the Government for money; it is still standing on its own two feet. Yet they are having to cut back on the bonuses they are paying because of the crisis. How much more should a bank, whose employees have survived by the good grace of the Government, also reconsider just what level of bonus if any should be going to any sector of its business?

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