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What is everyone’s opinion on bonuses?
There has been so much controversy in the UK lately over bankers and government department bonuses. Royal Bank of Scotland’s executive Stephen Hester was pressured into declining a bonus of almost £1,000,000 ($1.6m) due to public outrage; given that the bank is over 80% state owned. While, in my opinion Stephen Hester does a fantastic job at leading one of the biggest banks in the world, in recent years RBS have made over 21,000 people redundant and is majorly owned by the tax payer.
Today, the news details that Network Rail has been the latest institute under fire for allocating vast bonus funds for top executives. Political parties in the UK are insisting that ministers have the power to force a block on planned six figure payouts; the largest of which is £340,000 (over $500,000). These bonuses are planned while Network Rail is still pending prosecution over the recent serious crash in Cumbria.
The question I ask, is where do we draw the line? How long can we go on reflecting on the bad times of the recession and restricting bonuses and rewards? How can we expect to attract the visionaries – the best – to companies without matching industry standards?
I think we need to have clearly defined requirements for annual bonuses, which are carefully and transparently monitored – that way the organisation’s success can be easily determined based on the set goals for the year.