Treasury in full flight over executive bonuses
by Gill Montia
Story link: Treasury in full flight over executive bonuses
The Government is attempting to allay public disquiet over the prospect of failed banks paying out huge sums in executive bonuses.
The Treasury says it will be reviewing remuneration for those in the banking sector over the coming year and Treasury Secretary, Yvette Cooper, has indicated that banks that go ahead and reward failure could be excluded from a proposed asset protection scheme.
The scheme under development could mean the taxpayer will end up underwriting hundreds of billions of pounds of banks’ bad loans.
Royal Bank of Scotland (RBS) has today received another warning shot over bonuses, with Ms Cooper threatening a legal challenge to contractual obligations that are reported to involve paying up to £1 billion in bonuses this year.
Speaking on the BBC Radio 4’s Today programme, the Treasury Secretary added that even if a legal case for bonuses was established, RBS executives have a moral duty to turn them down.
RBS has stated that no decision has yet been made about 2009 bonus payments.
In addition, UK Financial Investments, the body set up to oversee state investment in the UK’s financial institutions, would have to approve any bonuses paid by the bank.
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