This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.

King: Taxpayer-backed firms must offer fair bonus structure

  • Print
  • Comment

Bank of England governor Mervyn King has called on the likes of Royal Bank of Scotland and Lloyds to make fair decisions on remuneration of its leading members of staff.

At a speech in Brighton yesterday, King said that the tragedy of this financial crisis is that those who have suffered most are those who had no responsibility for it.

He said that the legitimacy of a market economy would be challenged if “rewards go disproportionally to the small elite, especially one which benefited from the support of the taxpayer”.

He said: “Those taking decisions on remuneration, in the financial sector and elsewhere, need to understand that a market economy rests not just on incentives, but on the acceptance that the distribution of rewards is fair. That sense of fairness underpins the commitment to a market economy. An even bigger tragedy would be to deny the prosperity that flows from a market economy to those who need it most.”

Royal Bank of Scotland is currently 84 per cent owned by the taxpayer, while Lloyds Banking Group 41 per cent owned.

Earlier this week, Labour leader Ed Miliband has called on the Prime Minister to intervene and stop RBS chief executive Stephen Hester taking his bonus which is expected to be around £1.6m.

  • Print
  • Comment

Daily Email Updates
If you enjoyed this article, sign up to receive the latest news and analysis from Money Marketing.

Money Marketing Awards 2015
Put your firm forward as the leading practitioner in your field. Adviser and Advertising categories are open to entries - Enter Now.

Have your sayEdit my profile/screen name

You must sign in to make a comment

Fund Data

Editor's Pick


Do you see the value in adviser trade bodies?

Job of the week

Latest jobs

View all jobs

Most recent comments

View more comments