View more on these topics

King: Taxpayer-backed firms must offer fair bonus structure

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.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm