After another few weeks of fraught negotiations RBS will announce tomorrow that their investment bankers will share out a bonus pool of under 400 million pounds. That is significantly down on last year’s payments of 950 million pounds. And it’s a bigger cut in the level of bonuses than at Barclay’s. But it’s not a big volte face in how RBS pay their bankers, it is a reflection of how their investment banking arm has done this year – not well. The part of that business has been shedding jobs, 2,500 have gone in the last year.
The money will be shared out among the 17,000 employees of the investment banking business, depending on how much different employees’ contracts and performance varies. Yet although the level of bonus is on the way down there will still be payouts to individuals that will seem stratospheric to the vast majority of us. After the public relations disaster over the chief executive’s bonus a few weeks ago sources close to the process suggest decisions over the size of the bonus pool has been even more tense. Yet the question for Stephen Hester the bank’s chief executive tomorrow when the bank unveils their full results will still be – if it was right for him to turn down his bonus, why it is right to pay bonuses that are just as big to others who work for the majority taxpayer owned bank when it is not doing well.
Tags: bonuses, investment banking, rbs