We have been hearing a lot recently about Chief Executives and their bonuses but what has been happening?
Today Stephen Hester, RBS boss, has spoken out after rejecting his near £1m bonus. When asked why he turned down the bonus, he said:
“I took the judgement that it was going to be damaging for RBS to stay in the intensity of that spotlight that we had got into.” (via The Guardian)
The pressure was mounting on him from the public and politicians, arguing that it would be wrong for the boss of the 82% publically owned bank, to take a bonus of nearly £1m. So he turned it down.
Network Rail and their bonuses
On Tuesday Sir David Higgins stated that the company directors of Network Rail would not be claiming their payouts this year. Instead they are going to contribute to the safety improvement funds for level crossings. This is likely in response to the court hearing over the death of two girls at an Essex level crossing in 2005.
In response to this ongoing row, chancellor George Osborne has said that rewards of successes should be allowed and that he would fight an “anti-business culture”. The political debate is continuing in the House of Commons with Labour dismissing comments they are “anti-business”. The shadow business secretary Chuka Umunna said:
“Very large bonuses should only be paid to reflect genuine exceptional performance if trust in the system is to be maintained.” (Via BBC News)
Most of us are of the same view that we are ‘happy’ for people to get bonuses if:
- They actually deserve becuase of good work they have done
- The company has actually profited. None of us can understand how a company can afford to give bonuses to staff members when the company isn’t actually making any money!
The argument is that if they are doing a good job, why shouldn’t they be rewarded? Steven Hester is doing his job well and RBS are now performing better than before. Plus the company actually made a profit of £33bn, so there is an arguement there that he should have taken his bonus. However I truly respect him for turning it down for the sake of the company and it’s reputation.
This is an argument that is yet to be settled, even though most of us know what should be happening – bonuses for those who deserve it, in a company which is actually making money, as shadow business secretary Chuka Umunna says:
“Bank executives’ remunerations – stated to be ‘performance-related’ – should be just that, related to performance.” (via BBC NEWS)
The bonus argument is ages old and will no doubt continue for a while to come.
What is your opinion on the bonus argument? Do you get a bonus at work? If so how does it work? Let us know…