Banks and bonuses

Bankers bonkers bonuses again. The two main justifications for huge pay, as for other executives, which are rolled out again are never or rarely challenged in the media.
The first is that a corporation must pay a competitive rate to obtain the services of the “best” executives. This policy has failed dramatically. The banking collapse was the responsibility if those who had been recruited and remunerated on precisely these grounds. It would be far better not to have the “best” – i.e. those macho manipulators who are paid obscene salaries – but to recruit someone less exciting who has a measured sense of responsibility.

The second is that bonuses “incentivize” (horrid word) people to work harder. Bonuses may have encouraged executives to take risks, but if employers and employees are loyal and motivated, they should not (and generally do not) work hard or less hard in direct proportion to their pay. I would not have worked 10% less hard if I had been paid 10% less, and I would not have worked 10% harder for 10% more pay. I would have been pleased to be paid more – but that is another matter.

For some years I have been a “member” of the Co-operative bank, run by a financially illiterate reverend drug-taker. This an excerpt from the letter I have written to them.

The bank and all those responsible for its operation over the last 5 years should be in no doubt about the level of betrayal felt by its customers. I joined the bank because it was a co-operative and therefore different from other banks. The behaviour of the executive and the failure of the board to operate due diligence, not least in appointing the CEO, has been terrible even by the decayed standards of British banking.

Whatever assurance the bank may provide, any organisation dominated by hedge funds and other financial manipulators will clearly not have “members” welfare as its top priority. Customer care and service will become, as it is for all banks and large business entities, a tool of corporate self-interest rather than a goal in itself.

I will remain with the bank for the time being, largely because there is nowhere else to go.”