Cast your minds back three weeks, and there was much controversy about the financial rewards being received by bankers whose firms had been rescued from bankruptcy by taxpayers. Hmm, how times change. Anyway, it prompted Lib Dem Voice to ask our readers: What do you think should be done about bonuses in those banks recapitalised with taxpayers’ money?
Here’s what you told us:
>> 53% (212 votes) – No bonuses should be paid at all
>> 27% (109) – There should be a government-enforced cap on bonuses
>> 16% (66) – Payment of bonuses should remain at the banks’ discretion
>> 3% (14) – Don’t know / Other
Total Votes: 401. Poll ran: 10th February – 2nd March 2009
So a clear majority of you were firmly of the view that bankers’ bonuses – discretionary sums to reward individuals’ exceptional performances – should be scrapped in light of the overall failure of many banks.
Interestingly, in our current poll – focusing on RBS ex-chief’s Sir Fred Goodwin’s £650,000 pension – there is a clear majority (to date) of LDV readers saying he should keep it: but only because of the contractual agreement entered into with RBS and sanctioned by Labour’s business minister.
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Interesting contrast.
While being very firmly of the opinion that executive bonuses are generally made almost entirely of pure uncut Columbian Moral Hazard, bankers’ bonuses are less obviously so, although just because it’s a less pure mix doesn’t mean there’s none in there. Nevertheless, even without such complexities in play we’re dealing with contractual agreements that the government didn’t overlook as much as encourage while the boom was happening, and it seems like sour grapes to alter the rules when they don’t suit us any more. We should really have been paying attention in the first place.
When it comes to bonuses, really I suspect a lot of social capital could be gained by people announcing that they’re going to donate it to charity (for all the drop-in-the-bucket good it would do), but the notion of government passing arbitrary laws to seize property that individuals are legally entitled to really does not sit right with me.