Naked Politician Protests as Loss-Making Bankers Take Fat Bonuses

Aspiring politician Kit Fraser stripped to his boxer shorts outside RBS’s annual shareholder meeting last Tuesday. Inside the meeting, Chairman Sir Philip Hampton defended the bank from shareholder allegations over fat bonuses.

Aspiring politician Kit Fraser stripped to his boxer shorts outside RBS’s annual shareholder meeting last Tuesday. Inside the meeting, Chairman Sir Philip Hampton defended the bank from shareholder allegations over fat bonuses.

The mood during last week’s meeting was “uglier than any I remember in the past decade, with many investors enraged that the bank was paying out £1.1bn in bonuses – including a total package of £7.7m to chief executive Stephen Hester” according to Ian Fraser on his blog.

Shareholders believe the bonuses wiped out any profit at the Edinburgh-based institution. They are bewildered – and enraged – by the bank’s decision to shelf out huge bonuses to their staff, especially while the bank remains reliant on taxpayer support (and is in the red).

The bank reported £1.1bn loss in 2010. Investors aren’t getting any dividends – and they are pissed at the bank’s behavior. Small shareholder Ken Cramond told RBS directors had an “inflated idea of their own importance”. He added:

“You’re not irreplaceable, you’re paid too much. Can you and Stephen Hester answer how you can justify your bonus when frankly customer service is going down the toilet?”

Another shareholder, Tom Weir, said the bonuses paid out by the bank were:

“Really obscene to the degree of greed and corporate theft …You should not be paying yourselves anything until the debt is paid off to the government and to the people. [chief executive] Mr Hester has got his £7.7 million because it is agreed by the cabal in London.”

RBS chairman Sir Philip Hampton in his opening remarks said:

“In order to deliver this goal [returning the bank to an even keel] we need talented and motivated people and we need to be able to pay them fairly.”

He added:

“It is important to remember we have to motivate all staff and that only a tiny minority were responsible for the problems RBS encountered, all of whom have now left.”

Under pressure, Hampton admitted that he found the payment of bonuses “hard to justify”, echoing remarks he made in January about the “gangmaster culture” in investment banking three months ago. But he just felt he had to pay them or risk seeing an exodus of talent.

Read the full story on Naked Capitalism.