An industry source at one of the UK’s big-four banks told City A.M. that some lenders are having animated debates about how can they defuse the row over bonuses ahead of the annual results season next month.
There is a suggestion that instead of publishing the minimum legally required, a bank could put out figures that detail in layman’s terms when a bonus will be paid out and what is being rewarded.
“If there is detail on who is being paid what and when, then people will still be annoyed about the amount but at least it might go some way towards alleviating it,” said the source. “It would put the awards in the context of the value that’s being derived for shareholders.”
It would mean, for example, clarifying when and why an executive like John Hourican, former head of RBS’s wholesale bank, will get up to £4m in rewards for leading a division now being dismantled. “It is three years’ reward, during which [it] delivered £10bn in profits,” said the source.
But others argue that no matter how banks disclose pay, there will still be anger over the headline figure.
Business secretary Vince Cable recently discussed the issue with Barclays chief Bob Diamond, who is unsympathetic to the idea that privately owned banks should respond to political pressure.