Downing Street wona��t micro-manage bonuses

| January 30, 2012
Downing Street wona��t a�?micro-manage bonusesa��

Speaking to the BBC after the Royal Bank of Scotlanda��s chief executive announced his decision to forgo his bonus this year, the government has said that it will not block bonuses to the banka��s other executives.

RBS chief executive Stephen Hester was awarded A?963,000 in shares but following pressure from public opinion and MPs he decided to follow the example of Lloyds Banking Groupa��s chief executive and waive his award.

Lloyds chief AntA?nio Horta-OsA?rio gave up a bonus which could have been worth A?2.4m.

“We are not going to micro-manage bonuses,” a Downing Street spokeswoman said.

Bankersa�� bonuses have been coming under increasing scrutiny since the 2007 banking crisis and with most banks expected to record a drop in revenues this year, the bonuses have been perceived as a reward for failure.

Banksa�� investment banking operations suffered poor trading last year and multi- billion pound payouts for mis-sold payment protection insurance (PPI) have resulted in lower income which will reduce underlying profits.

Although Downing Street now plans to leave the question of bonuses to RBSa��s management, Labour says it will continue to closely monitor the bonuses awarded to senior staff at RBS which is 66 per cent owned by the government.

At a European Parliament hearing in Brussels today, the European Union said it may impose tighter regulations on banksa�� bonus payments to staff if they go against a�?all reason, common sense and morality.a�?

Michel Barnier, the European Union’s financial-services commissioner, may tighten up laws which govern banks across the EU if excessive bonuses continue to be paid.

One idea under consideration if for the role a bank’s shareholders play in setting pay awards to be strengthened.

Mr Barnier said the European Commission, the executive body of the European Union, will be a�?extremely vigilanta�? in monitoring bonuses paid by banks in 2012.

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