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What is a fair bonus for the boss of a nationalised company?

In RBS’s case, there will be a row every January until the bank is sold – for the government, doing nothing is not a policy

What’s a fair bonus for a boss of a nationalised institution, vital to the functioning of the UK economy, that has undergone an internal revolution but has yet to succeed in selling a single share from the state’s collection? Stephen Hester could be forgiven for noting how little political fuss accompanied the award of a £1.5m bonus in 2010 to Adam Crozier for his efforts as chief executive of the Royal Mail.

There are differences, of course. For a start, Crozier’s bonus represented the flowering of a three-year incentive scheme; Hester’s near-£1m bonus was for a single year’s performance and he remains a member of a long-term scheme. On the other hand, fixing Royal Bank of Scotland is probably a stiffer challenge even than modernising the Royal Mail.

The point is that the government needs to decide how to treat pay and bonuses at nationalised and semi-nationalised companies that wish to recruit executives from the private sector. In RBS’s case, there will be a row every January until the bank is sold – indeed, there will be more argy-bargy within weeks when executives below board level are handed their winnings. Doing nothing, while praying that Ed Miliband doesn’t table a Commons motion, is not a policy. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds