The TUC has called for a “wholesale review” of bonuses at the banks given a £37bn injection of taxpayers’ cash today.
The government this morning announced a package that will see taxpayers take a 60% stake in RBS and own 40% of the merged Lloyds TSB and HBOS bank. Chancellor Alistair Darling said senior board members at the banks would not receive bonuses this year.
Senior figures at the bailed-out banks left their posts. RBS chief executive Fred Goodwin quit, while its chairman, Tom McKillop, is to retire. HBOS chief executive Andy Hornby and chairman Lord Dennis Stevenson are also to stand down.
TUC general secretary Brendan Barber welcomed the government announcement, but he said: “The banks today have received as much cash as the annual defence budget. Taxpayers will want to see big changes in return.
“It is not enough to limit cash boardroom bonuses for a year and accept a few ritual resignations. There cannot be big payoffs for those who go, as was the case with Northern Rock.
“There needs to be a wholesale review of bonuses and pay throughout the upper levels of these banks, not just a year-long ban on boardroom cash bonuses.”
The Treasury earlier said that the recapitalisation scheme relied on banks agreeing to a range of commitments, including bonus structures and director appointments.
“In 2008, the government expects no cash bonuses to be paid to board members,” it said in a statement.
“For remuneration policy going forward, incentive schemes will be reviewed and linked to long-term value creation, taking account of risk and restricting the potential for rewards for failure.”
The government also reserved the right to agree with boards the appointment of independent non-executive directors.