Britain’s bank bosses are planning to accept their bonuses for the first time in two years, taking home a combined payout of up to £15 million, it has been reported.
The chief executives of Barclays, HSBC, part-nationalised banks Lloyds and Royal Bank of Scotland, and Standard Chartered have previously waived their payments or donated them to charity, but this year are said to be minded to keep the money, according to The Sunday Times.
The controversial move comes as the same chief executives are understood to be in discussions over a joint plan to cut the bonus pool and boost lending to small businesses in a bid to temper public anger.
Bankers’ pay packets are continuing to recover to pre-credit crunch levels. A study by the Centre for Economics and Business Research (CEBR) – which took into account all City workers including fund managers and staff working with equities and bonds – forecast the total bonus pot to hit £7 billion this year alone.
Pressure on the banking sector to lower the pooled bonus pot is mounting from politicians and business ahead of January’s bonus round.
Chancellor George Osborne was recently accused of u-turning over plans to force banks to reveal the number of staff paid more than £1 million, while Business Secretary Vince Cable renewed his attack on City bonuses on Friday. Mr Cable said he was “not persuaded” banks realised they needed to limit bonuses, and added excessive payouts remained a “major irritant”.
City bonuses are expected to be down sharply this year because of a steep drop in profits at most investment banks. But the bonuses paid to the chief executives are linked to a broader set of targets. Stephen Hester, chief executive of RBS is in line for a bonus of up to £2.4 million, while Eric Daniels, the outgoing chief executive of Lloyds, could receive up to £2.3 million.
The British Bankers’ Association, the industry trade body, claims Britain already has the toughest bonus regime in the world. In a recent statement it said: “Outside the UK, the concern on bonuses is either much more limited or hardly exists at all.”