How should we incentivise bankers to change their ways?
RBS boss Stephen Hester has spoken today about his decision to decline his £1.4m bonus after outcries by the public and the press about banker’s bonuses and bail-outs.
After reading the communication to RBS employees on the BBC website, I do feel some sympathy for Mr Hester and the way he has been treated throughout the affair. In fact, the communication appears to be a genuine attempt to reassure and encourage his staff that their efforts are appreciated and a reminder that they have made some achievements in turning themselves around.
I’d almost say that he seems like one of the good guys…
This is obviously a sensitive issue as many people are feeling the pinch of the economic downturn caused by mismanagement in the banking industry and it is only natural that they are angry that the government were forced to bail them out. But is it fair that everybody involved in the banking industry should be demonised because of the actions of their predecessors?
If the banks are to change their fortunes then they will need to attract the right people to do so. How can they do that in the face of press scrutiny and without the help of financial incentives?