Published on WSWS, by Jean Shaoul, July 1, 2009.
No matter that just eight months ago Britain’s banks were staring into the abyss, had to be bailed out by the government, and precipitated the worst economic depression since the 1930s; the Royal Bank of Scotland (RBS) has announced a 50 percent salary deal for its chief executive, Stephen Hester.
Hester has been granted salary and perks worth £9.6 million a year for three years. His package includes close to £6.4 million of long-term share and stock option awards, as well as £1.2 million in salary and an estimated £2 million of annual non-cash bonus payments.
According to the Guardian, RBS’s largesse towards Hester is by no means unique. RBS has also been accused of poaching staff from other banks by offering guaranteed bonuses …
… In the last week, Network Rail, which owns and manages the national railway infrastructure, announced that its top bosses will get bonuses of more than £1.2 million despite criticism of the firm’s performance. Chief Executive Ian Coucher will get more than £150,000 in incentive payments for the performance of the company over the last three years, on top of his basic salary of £605,000. He recently agreed to waive a separate incentive payment—an annual bonus of £300,000—after a public outcry. His fellow directors have no such scruples. Peter Henderson and Ron Henderson will each get bonuses of more than £300,000, while Robin Gisby will get £140,000.
Network Rail relies on the government for nearly two-thirds of its funding. None of this is a reward for good performance.
Network Rail’s profit for 2008-2009 fell to £1.52 billion, from £1.59 billion the previous year, and its debt—guaranteed by the government—rose to £22.3 billion from £19.7 billion. It failed to meet its efficiency savings targets set by the rail regulator, while its performance on the recently upgraded West Coast Main Line, at a cost of £9 billion, could constitute a breach of its licence and result in a multi-million-pound fine.
Elsewhere, companies are laying-off workers. Unemployment is expected to reach 3.5 million by the end of the year. As well as slashing jobs, companies are demanding wage cuts and freezing pension benefits. At British Airways, which called for workers to work without pay for a month in order to cut costs, 800 workers have volunteered to work for nothing for up to a month. Another 4,000 employees are taking unpaid leave, while 1,400 people have volunteered to work part-time. (full text).