Hester supporting bankers’ bonuses

8 February 2012

In an interview with the BBC, the Royal Bank of Scotland boss has said nothing to alter the bonus culture mentality.

Slowly the country is learning the price for abandoning Christian motivation in the workplace.

Responding to the public outcry about bankers’ bonuses, the chief executive of the Royal Bank of Scotland, Stephen Hester, has told his staff in a letter that the row over executive pay had been “disconcerting to say the least”.

In his first interview to the BBC’s Today programme since foregoing his bonus, the chief executive of the Royal Bank of Scotland, Stephen Hester, told James Naughtie that he had considered resigning but that he thought it was the wrong thing to do for “it would be indulgent for me to resign”.  Hester gave up a bonus worth almost £1m following continued public debate about it, although he thought that he deserved the bonus for his work in “defusing the biggest time bomb in history in terms of bank balance sheets”, as he put it,

The withdrawal of Fred Goodwin’s knighthood has moved the debate on to excessive bonuses.  A series of senior executives have foregone bonuses, and the concerns expressed by some senior executives has brought out George Osborne in their defence.

The unanswered question
Naughtie began with, and kept coming back to the question, Why is £1.2million of a basic salary not enough?  Hester hid behind the fact that he was not a politician, that he did not set his own pay, that it was a societal issue, etc., but he would not address the question.  In other words, either he has no answer or this non-politician is playing politics on behalf of bonus-earning executives.  However his politics was not very convincing and he has failed to demonstrate that his own values are any different from the system he is trying to sort out.

Now that Hester has made public his thought of resigning, the only motivation he cited in his interview was financial reward, although he employs an additional and a competitive motive in a memo to RBS staff to “prove the critics wrong”.  He claimed that the issue was not how one divides the pie but whether one has a pie at all, demonstrating that he thought that pay differentials was a secondary issue.  He failed to engage with the argument that such motivation suggests values not shared by society, and that such values demoralise equally gifted people in other sectors of society.

It reminds us of the Secret Millionnaire who said that he would do nothing without being paid for it.

This highlights the need for Christian values in our society.  It seems that a good day’s work is not good enough for those at the top end of the pay scale.  Competition also motivates them; and competing who has the highest salary seems to be their yardstick for measuring their worth in the workplace.  It is time for some academic reality to be brought to bear upon such pretensions, as well as Christian principles.

With Christian motivation gone from society, high fliers need to find another one - and Stephen Hester and those who preceded him are of the view that financial incentives are the best ones.  We are stoking another bubble, having failed to defuse this ticking bomb which lost us our pie, if one can excuse the mixed metaphors.

This is a strange state of affairs.  Overpaid non-bankers got the banks into a mess; and overpaid non-bankers have been appointed to pull them out of the mess.  Could it be that banks should be handed back to bankers - people trained in assessing risk?  Is this too revolutionary?

This interview demonstrates that “a man persuaded against his will is of the same opinion still”.  Hester has foregone his bonus, and neither he, nor a charity to which he could have donated it, has benefitted from it - not very politically astute.

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