It is high on the government’s agenda to promote Equality and Diversity training in the workplace, it seems that it is encouraged in the wages department in particular and Royal Bank of Scotland certainly offers some good examples to mull over. It would be a little thought-provoking for Stephen Hester, Chief Executive of the RBS to line up a crowd of clever, committed and ambitious managers who are working and worrying day by day to keep their jobs on a miserly £35k a year until the total of all their earnings totalled what he earns as salary each year. Well, there would be around 34 people in the line-up with a top line salary adding up to £1.2 m. Now let’s assume that they all do a satisfactory or barely satisfactory job and their employer follows the RBS line by giving them a (reduced) bonus of just £27,500 each, almost doubling their remuneration. I imagine once they would be able to cash in the bonus shares that sum might to pay off a credit card, give the family a great holiday and go toward university fees – but it would not have a life-changing impact.
But for Stephen Hester the bonus valued at £963,000 is enough, on top of his £1.2m salary (what does he spend it on?), to buy outright the houses of as many as four of the managers in the line up (they will be paying the mortgage for another 25 years). That bonus would pay off the student loan of 50 struggling young employees at RBS; it would pay for meals-on-wheels for 200+ old people for a year.
Strikes me that diversity in pay is out of control, equality is out of the window. Equality and diversity training for the banks, particularly at the level of the RBS remuneration committee, seems log overdue. All credit to Stephen Hester himself for declining the bonus he had been awarded by the committee.
By Mike Cooney | Righttrack’s Commercial and Financial Director